a. How much total cash should the partnership distribute in order to apply the profit or loss ratio of all partners in distribution?b. How much cash is distributed to partners during February?c. How much cash did Henry received during March? Cliff, Jay, and Henry are partners who share profits and losses in the ratio of 40:30:30, respectively. OnJanuary 1, 2018, they decided to liquidate the partnership and the statement of financial position was preparedas follows:ASSETSLIABILITIES & EQUITY40,00090,000CashLiabilitiesJay, LoanHenry, LoanCliff, CapitalJay, CapitalHenry, CapitalТОTAL40,00010,00015,00020,00020,00025,000130,000Noncash AssetsТОTAL130,000The following transactions occurrd as a result of the liquidation process:Cash withheld forProceeds fromLiquidationexpenses paidPayment tooutside creditorspossibleliquidationrealizationJanuaryFebruaryMarch17,500.0030,000.0025,000.005,000.005,500.007,000.0016,000.0010,000.0014,000.00expenses2,500.002,000.00

It is an agreement between two or more parties to conduct the business and share the profits and…

Answered: Cliff, Jay, and Henry are partners who…

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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a. How much total cash should the partnership distribute in order to apply the profit or loss ratio of all partners in distribution?

b. How much cash is distributed to partners during February?

c. How much cash did Henry received during March?

Cliff, Jay, and Henry are partners who share profits and losses in the ratio of 40:30:30, respectively. On
January 1, 2018, they decided to liquidate the partnership and the statement of financial position was prepared
as follows:
ASSETS
LIABILITIES & EQUITY
40,000
90,000
Cash
Liabilities
Jay, Loan
Henry, Loan
Cliff, Capital
Jay, Capital
Henry, Capital
ТОTAL
40,000
10,000
15,000
20,000
20,000
25,000
130,000
Noncash Assets
ТОTAL
130,000
The following transactions occurrd as a result of the liquidation process:
Cash withheld for
Proceeds from
Liquidation
expenses paid
Payment to
outside creditors
possible
liquidation
realization
January
February
March
17,500.00
30,000.00
25,000.00
5,000.00
5,500.00
7,000.00
16,000.00
10,000.00
14,000.00
expenses
2,500.00
2,000.00

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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