A partnership held three assets: Cash $ 59,000 Land $ 45,000 Building $ 64,000 and liabilities were $ 30,000 The partners decided to dissolve the business and anticipated that expenses required to liquidate their partnership would amount to $ 5,000 Capital balances were as follows: King, capital $ 24,000 Murphy, capital 30,000 Madison, capital 48,000 Pond, capital 36,000 The partners shared profits and losses 10:20:30:40 respectively. The cash on hand was used to pay the liabilities. Any remaining cash in excess of the amount needed for anticipated liquidation expenses was immediately distributed to the partners. a. What is the total amount of cash that was immediately available to be distributed to the partners? b. The cash (in item a.) was distributed to each partner in a single payment. Show the total payment amount to each partner. (Show the amount of the single check that was written to each partner.) Support your answer with a predistribution plan (or schedule).
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.
A
Land $ 45,000
Building $ 64,000
and liabilities were $ 30,000
The partners decided to dissolve the business and anticipated that expenses required to
liquidate their partnership would amount to $ 5,000
Capital balances were as follows:
King, capital $ 24,000
Murphy, capital 30,000
Madison, capital 48,000
Pond, capital 36,000
The partners shared
The cash on hand was used to pay the liabilities. Any remaining cash in excess of
the amount needed for anticipated liquidation expenses was immediately
distributed to the partners.
a. What is the total amount of cash that was immediately available to be
distributed to the partners?
b. The cash (in item a.) was distributed to each partner in a single payment.
Show the total payment amount to each partner. (Show the amount of the
single check that was written to each partner.) Support your answer with a
predistribution plan (or schedule).
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