Answered: Marciano, Tunney, and Jeffries formed a…

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

Marciano, Tunney, and Jeffries formed a partnership with an income ratio of 6:2:2, respectively. After liquidation of the partnership, cash of $192,000 was available. Marciano had a capital balance of $112,000, and Tunney had a capital balance of $104,000. Jeffries had a capital deficiency of $24,000. How much cash should be distributed to Tunney if Jeffries does not pay his deficiency?

1. $98,000.

2. $101,000.

3. $95,000.

4. $104,000.

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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