The partnership of Mark, Kathy, and Case has been dissolved and is in the process of liquidation. On July 1, 2017, just before the second cash distribution, the assets and equities of the partnership along with residual profit sharing ratios were as follows: Liabilities & Equities $ 200,000 Assets Liabilities Mark, Capital 50% Inventories Kathy, Capital 30% Equipment-net Case Capital 20% Total assets $ 500,000 Total Lia & Equity 500,000 Assume that Mark takes equipment with a fair value of $40,000 and a book value of $50,000 in partial satisfaction of his equity in the partnership. If all the $200,000 cash is then distributed, the partners should receive: a. Mark, 25,000; Kathy, 15,000; Case 10,000 b. Mark- 0; Kathy, 50,000; Case, - 0 c. Mark, $100,000; Kathy, $60,000; Case, $40,000 d. Mark, - 0; Kathy, 45,000; Case, 5,000 Cash Receivables-net 50,000 150,000 100,000 $ 150,000 100,000 175,000 75,000
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.
![The partnership of Mark, Kathy, and Case has been dissolved and is in the process of liquidation. On
July 1, 2017, just before the second cash distribution, the assets and equities of the partnership along
with residual profit sharing ratios were as follows:
Liabilities & Equities
$ 200,000
Assets
Cash
Liabilities
Mark, Capital 50%
Kathy, Capital 30%
Equipment-net 100,000
Case Capital 20%
Total assets
$ 500,000
Total Lia & Equity
500,000
Assume that Mark takes equipment with a fair value of $40,000 and a book value of $50,000 in
partial satisfaction of his equity in the partnership. If all the $200,000 cash is then distributed, the
partners should receive:
Receivables-net 50,000
Inventories
150,000
$ 150,000
a. Mark, 25,000; Kathy, 15,000; Case 10,000
b. Mark- 0; Kathy, 50,000; Case, - 0
C. Mark, $100,000; Kathy, $60,000; Case, $40,000
d. Mark, - 0; Kathy, 45,000; Case, 5,000
100,000
175,000
75,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc18f4c93-8a56-4036-8450-54a54b487f57%2Fb5b5ff0b-bede-40a1-91d8-3218809f2a1e%2Fyxpmdkc_processed.png&w=3840&q=75)
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