The balance sheet of Morgan and Rockwell was as follows immediately prior to the partnership's liquidation: cash, $23,600; other assets, $147,000; liabilities, $35,000; Morgan, capital, $61,500; Rockwell, capital, $74,100. The other assets were sold for $123,300. Morgan and Rockwell share profits and losses in a 2:1 ratio. As a final cash distribution from the liquidation, Morgan will receive cash totaling Oa. $61,500 Ob. $45,700 Oc. $23,600 Od. $15,733
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.
Step by step
Solved in 3 steps with 1 images
