Answered: What is the amount of loss or gain in…

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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Question

Roberto Orcajada and Ryan Morales are partners who share profits and losses equally. The credit balances of their capital accounts before liquidation are 700,000 and 900,000, respectively. They decided to liquidate their partnership. They sold all the noncash assets and paid all the partnership's liabilities leaving a balance of 1,100,000 in cash.

2. What is the amount of loss or gain in realization?

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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