The balance sheet for the Delphine, Xavier, and Olivier partnership follows: Cash $ 63,600 Liabilities $ 42,500 Noncash assets 110,000 Delphine, capital 77,200 Xavier, capital 45,000 Olivier, capital 8,900 Total assets $ 173,600 Total liabilities and capital $ 173,600 Delphine, Xavier, and Olivier share profits and losses in the ratio of 5:4:1, respectively. The partners have agreed to terminate the business and estimate that $13,000 in liquidation expenses will be incurred. What is the amount of cash that safely can be paid to partners prior to liquidation of noncash assets? Calculate the amount of safe payment that can be made to each partner prior to liquidation of noncash assets.
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is 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, drawings of a partner, etc.
The balance sheet for the Delphine, Xavier, and Olivier
| Cash | $ | 63,600 | Liabilities | $ | 42,500 | |
| Noncash assets | 110,000 | Delphine, capital | 77,200 | |||
| Xavier, capital | 45,000 | |||||
| Olivier, capital | 8,900 | |||||
| Total assets | $ | 173,600 | Total liabilities and capital | $ | 173,600 | |
Delphine, Xavier, and Olivier share
- What is the amount of cash that safely can be paid to partners prior to liquidation of noncash assets?
- Calculate the amount of safe payment that can be made to each partner prior to liquidation of noncash assets.
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