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.
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