XYZ Partnership begins the liquidation process with the following balance sheet and profit and loss percentages: Cash 280,000 Noncash Assets 300,000 Liabilities 200,000 X Capital (40%) 100,000 Y Capital (30%) 150,000 Z Capital (30%) 130,000 Liquidation expenses are estimated at $50,000. Assume any deficit in a partner’s capital balance will not be repaid. How much is the safe payment that can be made to partner Z
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.
XYZ
Cash 280,000
Noncash Assets 300,000
Liabilities 200,000
X Capital (40%) 100,000
Y Capital (30%) 150,000
Z Capital (30%) 130,000
Liquidation expenses are estimated at $50,000. Assume any deficit in a partner’s capital balance will not be repaid.
How much is the safe payment that can be made to partner Z (hint: prepare a proposed schedule of liquidation).
|
a. |
$0 |
|
|
b. |
$15,000 This is the ans |
|
|
c. |
$25,000 |
|
|
d. |
$10,000 i got this |
|
|
e. |
$5,000 |
Step by step
Solved in 2 steps
