The balance sheet for the Delphine, Xavier, and Olivier partnership follows: Cash $ 72,960 Liabilities $ 49,000 Noncash assets 136,000 Delphine, capital 77,640 Xavier, capital 58,000 Olivier, capital 24,320 Total assets $ 208,960 Total liabilities and capital $ 208,960 Delphine, Xavier, and Olivier share profits and losses in the ratio of 4:4:2, respectively. The partners have agreed to terminate the business and estimate that $15,600 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
| Cash | $ | 72,960 | Liabilities | $ | 49,000 | |
| Noncash assets | 136,000 | Delphine, capital | 77,640 | |||
| Xavier, capital | 58,000 | |||||
| Olivier, capital | 24,320 | |||||
| Total assets | $ | 208,960 | Total liabilities and capital | $ | 208,960 | |
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.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
