The Danica, Gaga & Oprah partnership was begun with investments by the partners as follows: Danica,$190; Gaga, $340; and Oprah, $550. Danica, Gaga, and Oprah share income and losses in a 1:1:2 ratio (inpercents: Danica, 25%; Gaga, 25%; and Oprah, 50%). The partners decide to liquidate the partnership aftera few months. On July 31, after all assets were sold and all creditors were paid, only $80 in partnershipcash remain. Assume that Danica cannot cover the deficit. Prepare journal entries (a) to transfer the deficit of Danica to the other partners and (b) to record the final disbursement of cash to partners.
The Danica, Gaga & Oprah partnership was begun with investments by the partners as follows: Danica,$190; Gaga, $340; and Oprah, $550. Danica, Gaga, and Oprah share income and losses in a 1:1:2 ratio (inpercents: Danica, 25%; Gaga, 25%; and Oprah, 50%). The partners decide to liquidate the partnership aftera few months. On July 31, after all assets were sold and all creditors were paid, only $80 in partnershipcash remain. Assume that Danica cannot cover the deficit. Prepare journal entries (a) to transfer the deficit of Danica to the other partners and (b) to record the final disbursement of cash to partners.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The Danica, Gaga & Oprah
$190; Gaga, $340; and Oprah, $550. Danica, Gaga, and Oprah share income and losses in a 1:1:2 ratio (in
percents: Danica, 25%; Gaga, 25%; and Oprah, 50%). The partners decide to liquidate the partnership after
a few months. On July 31, after all assets were sold and all creditors were paid, only $80 in partnership
cash remain. Assume that Danica cannot cover the deficit. Prepare
to the other partners and (b) to record the final disbursement of cash to partners.
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