The liquidation of the partnership of Cheska, Darryl and Eunice resulted in a deficiency in Cheska’s capital account of P100,000. Cheska can contribute only P25,000 to offset her deficiency. Darryl and Eunice, who have capital balances of P250,000 and P50,000 and share profits and losses in the ratio of 2:3 will absorb the deficiency as follows:A. Darryl – P30,000; Eunice – P45,000B. Darryl – P37,500; Eunice – P37,500C. Darryl – P45,000; Eunice – P30,000D. Darryl – P0; Eunice – P0WHAT IS THE CORRECT LETTER OF THE ANSWER?

Deficit partner refer to the partner who is having debit balances in the company after receiving…

Answered: The liquidation of the partnership of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The liquidation of the partnership of Cheska, Darryl and Eunice resulted in a deficiency in Cheska’s capital account of P100,000. Cheska can contribute only P25,000 to offset her deficiency. Darryl and Eunice, who have capital balances of P250,000 and P50,000 and share profits and losses in the ratio of 2:3 will absorb the deficiency as follows:

A. Darryl – P30,000; Eunice – P45,000

B. Darryl – P37,500; Eunice – P37,500

C. Darryl – P45,000; Eunice – P30,000

D. Darryl – P0; Eunice – P0

WHAT IS THE CORRECT LETTER OF THE ANSWER?

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement 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, and drawings of a partner.

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