The balance sheet of the Maude, Ned, and Oscar partnership on November 1, 2014 (before commencement of partnership liquidation) was as follows: Cash $ 12,000 Georgia, capital (40%) $ 36,000 Holly, capital (30%) 6,000
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.
Cash $ 12,000 Georgia, capital (40%) $ 36,000
Holly, capital (30%) 6,000
Festus, capital (50%) 31,000
Total assets $ 90,000 Total liab./equity $ 90,000
Cash $ 70,000 Accounts payable $ 42,000
Inventory 60,000 Notes payable 68,000
Loan to Maude 10,000 Maude, capital (20%) 30,000
Loan to Oscar 18,000 Ned, capital (20%) 32,000
Plant assets-net 80,000 Oscar, capital (60%) 66,000
Total assets $ 238,000
Liquidation events in November were as follows:
- All the inventory was sold for $10,000 above book value;
- Plant assets with a book value of $60,000 were sold for $34,000.
Determine how the available cash on November 31, 2014 should be distributed.
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