Partner A, B, C, and D, who share profits 5:3:1:1 respectively, decided to liquidate their partnership. Capital balances at this time were 160,000, 140,000, 130,000, and 70,000 respectively. Additional information: • Cash on hand at the beginning is 25,000 • Partnership furniture with a book value of 25,000 is to be taken over by Partner A at a price of 10,000 in full settlement of a loan payable to A. • Partnership creditors’ claims of 120,000 and liquidation expenses of 3,000 were paid off. The remaining non-cash assets were sold at 75% of their carrying values. How much did A, B, C, and D receive in the final settlement?
Partner A, B, C, and D, who share profits 5:3:1:1 respectively, decided to liquidate their partnership. Capital balances at this time were 160,000, 140,000, 130,000, and 70,000 respectively. Additional information: • Cash on hand at the beginning is 25,000 • Partnership furniture with a book value of 25,000 is to be taken over by Partner A at a price of 10,000 in full settlement of a loan payable to A. • Partnership creditors’ claims of 120,000 and liquidation expenses of 3,000 were paid off. The remaining non-cash assets were sold at 75% of their carrying values. How much did A, B, C, and D receive in the final settlement?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Partner A, B, C, and D, who share profits 5:3:1:1 respectively, decided to liquidate their partnership . Capital balances at this time were 160,000, 140,000, 130,000, and 70,000 respectively. Additional information: • Cash on hand at the beginning is 25,000 • Partnership furniture with a book value of 25,000 is to be taken over by Partner A at a price of 10,000 in full settlement of a loan payable to A. • Partnership creditors’ claims of 120,000 and liquidation expenses of 3,000 were paid off. The remaining non-cash assets were sold at 75% of their carrying values. How much did A, B, C, and D receive in the final settlement?
A – 78,500, B – 91,100, C – 113,700, and D – 53,700
A – 88,500, B – 91,100, C – 113,700, and D – 53,700
A – 91,250, B – 92,750, C – 114,250, and D – 54,250
A – 83,500, B – 94,100, C – 114,700, and D – 54,700
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