The following balance sheet os for a local partnership in which the partners have become very unhappy with each other. To avoid further conflict, they have decided to cease operations and sell all assets. Cash 40,000 Liabilities 30,000 Land 130,000 Michael, capital 80,000 Building 120,000 Fernando, capital 30,000 Alvin, capital 60,000 JL, capital 90,000 Total 290,000 290,000 Assume that profits and losses are allocated on a 1:3:4:2 basis, repectively. How much money must be received from selling the land and building to assure that all partners are given cash?
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 following
Cash 40,000 Liabilities 30,000
Land 130,000 Michael, capital 80,000
Building 120,000 Fernando, capital 30,000
Alvin, capital 60,000
JL, capital 90,000
Total 290,000 290,000
Assume that
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