Answered: Barley, capital (50% share of all…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A local partnership is liquidating and is currently reporting the following capital balances:

Desai has indicated that a forthcoming contribution will cover the $24,000 deficit. However, the two remaining partners have asked to receive the $52,000 in cash that is currently available. How much of this money should each of the partners receive?

Barley, $22,000; Carter, $30,000.
Barley, $32,000; Carter, $20,000.
Barley, $29,000; Carter, $23,000.
Barley, $32,500; Carter, $19,500.

Transcribed Image Text:Barley, capital (50% share of all profits and losses).. Carter, capital (30%) . Desai, capital (20%). .... $ 44,000 32,000 (24,000)

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

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