The following condensed balance sheet is for the partnership of Miller, Tyson, and Watson, who share profits and losses in the ratio of 6:2:2, respectively: Cash $ 63,000 Liabilities $ 53,000 Other assets 160,000 Miller, capital 75,000 Tyson, capital 75,000 Watson, capital 20,000 Total assets $ 223,000 Total liabilities and capital $ 223,000 a. Assuming no liquidation expenses, calculate the safe payments that can be made to partners at this point in time. Miller Tyson Watson Safe payments b. For how much money must the other assets be sold so that each partner receives some amount of cash in a liquidation? other assets must be sold (for an amount less than) or (for an amount o
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.
The following condensed
| Cash | $ | 63,000 | Liabilities | $ | 53,000 | |||
| Other assets | 160,000 | Miller, capital | 75,000 | |||||
| Tyson, capital | 75,000 | |||||||
| Watson, capital | 20,000 | |||||||
| Total assets | $ | 223,000 | Total liabilities and capital | $ | 223,000 | |||
a. Assuming no liquidation expenses, calculate the safe payments that can be made to partners at this point in time.
Miller Tyson Watson
Safe payments
b. For how much money must the other assets be sold so that each partner receives some amount of cash in a liquidation?
other assets must be sold (for an amount less than) or (for an amount over)
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