Prior to liquidating their partnership, Samuel and Brian had capital accounts of $60,000 and $240,000, respectively. The partnership assets were sold for $120,000. The partnership had no liabilities. Samuel and Brian share income and losses equally.**Required:**a. Determine the amount of Samuel’s deficiencyb. Determine the amount distributed to Brian, assuming Samuel is unable to satisfy the deficiencyShow Your Work:The text of this work is not shown.

Partnership: It is a form of business where income or loss get divided among partners as per the…

Answered: Prior to liquidating their partnership,…

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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Wright, Bell, and Edison are partners and share income in a 2:5:3 ratio. The partnership's capital balances are as follows: Wright, $33,000, Bell $27,000 and Edison $40,000. Edison decides to withdraw from the partnership, and the partners agree not to revalue the assets upon Edison's retirement. The journal entry to record Edison's June 1 withdrawal from the partnership if Edison sells his interest to Whitney for $45,000 after the other two partners approve Whitney as partner is: Multiple Choice Debit Edison, Capital $45,000, credit Whitney, Capital $45,000 Debit Edison, Capital $40,000; credit Cash $40,000 Debit Edison, Capital $40,000; debit Wright, Capital $2.500; debit Bell, Capital $2.500; credit Whitney, Capital $45,000 Debit Edison, Capital $40,000, credit Whitney, Capital $40,000 Debit Edison, Capital $40,000, debit Cash $5,000, credit Whitney, Capital $45,000.
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Prior to liquidating their partnership, Sam and Brian had capital accounts of $60,000 and $240,000, respectively. The partnership assets were sold for $120,000. The partnership had no liabilities. Sam and Brian share income and losses equally Determine the amount of Sam’s deficiency. Determine the amount distributed to Brian, assuming Sam is unable to satisfy the deficiency. Show your work:
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