1. A partnership has the following capital balances: A ( 20% ofprofits and losses) $ 100,000 B ( 30% of profits and losses) $120,000 C ( 50% of profits and losses) $ 180,000 If the partnershipis to be liquidated and $ 30,000 becomes immediately available, whogets that money? Show your work: 2. The following balance sheet isfor a local partnership in which the partners have become veryunhappy with each other. To avoid more conflict, the partners havedecided to cease operations and sell all assets. Using thisinformation, answer the following questions. Each question shouldbe viewed as an independent situation related to the partnershipsliquidation. a. The $ 10,000 cash that exceeds the partnershipliabilities is to be disbursed immediately. If profits and lossesare allocated to Adams, Baker, Carvil, and Dobbs on a 2: 3: 3: 2basis, respectively, how will the $ 10,000 be divided? b. The $10,000 cash that exceeds the partnership liabilities is to bedisbursed immediately. If profits and losses are allocated on a 2:2: 3: 3 basis, respectively, how will the $ 10,000 be divided? Showyour work.
A, Capital B, Capital C, Capital Reported Balances $ 100,000 $ 120,000 $ 180,000 Assumed $370,000 loss Potential balances Potential loss from C'sdeficit* Current cash distribution *The split is 20/30 or 40%/60%
Requirement A: Since the partnershipcurrently has total capital of $260,000, the $10,000 that isavailable would indicate maximum potential losses of$250,000. Adams, Baker, Carvil, Dobbs, Capital Capital Capital Capital Reported Balances Assumed $250,000 loss (2:3:3:2) Potential balances Potential loss from deficits (1:1) Current cash distribution Requirement B: Same cash to distribute, differentallocations: Adams, Baker, Carvil, Dobbs, Capital Capital Capital Capital Reported Balances Assumed $250,000 loss (2:2:3:3) Potential balances, Step 1 Potential loss from deficits (4:6) Potential balances, Step 2 Potential loss from deficit (100%) Current cash distribution
1. A partnership has the following capital balances: A ( 20% ofprofits and losses) $ 100,000 B ( 30% of profits and losses) $120,000 C ( 50% of profits and losses) $ 180,000 If the partnershipis to be liquidated and $ 30,000 becomes immediately available, whogets that money? Show your work: 2. The following balance sheet isfor a local partnership in which the partners have become veryunhappy with each other. To avoid more conflict, the partners havedecided to cease operations and sell all assets. Using thisinformation, answer the following questions. Each question shouldbe viewed as an independent situation related to the partnershipsliquidation. a. The $ 10,000 cash that exceeds the partnershipliabilities is to be disbursed immediately. If profits and lossesare allocated to Adams, Baker, Carvil, and Dobbs on a 2: 3: 3: 2basis, respectively, how will the $ 10,000 be divided? b. The $10,000 cash that exceeds the partnership liabilities is to bedisbursed immediately. If profits and losses are allocated on a 2:2: 3: 3 basis, respectively, how will the $ 10,000 be divided? Showyour work.
| A, Capital | B, Capital | C, Capital | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reported Balances | $ 100,000 | $ 120,000 | $ 180,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Assumed $370,000 loss | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Potential balances | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Potential loss from C'sdeficit* | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current cash distribution | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| *The split is 20/30 or 40%/60%
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Related questions
1. A partnership has the following capital balances: A ( 20% ofprofits and losses) $ 100,000 B ( 30% of profits and losses) $120,000 C ( 50% of profits and losses) $ 180,000 If the partnershipis to be liquidated and $ 30,000 becomes immediately available, whogets that money? Show your work: 2. The following balance sheet isfor a local partnership in which the partners have become veryunhappy with each other. To avoid more conflict, the partners havedecided to cease operations and sell all assets. Using thisinformation, answer the following questions. Each question shouldbe viewed as an independent situation related to the partnershipsliquidation. a. The $ 10,000 cash that exceeds the partnershipliabilities is to be disbursed immediately. If profits and lossesare allocated to Adams, Baker, Carvil, and Dobbs on a 2: 3: 3: 2basis, respectively, how will the $ 10,000 be divided? b. The $10,000 cash that exceeds the partnership liabilities is to bedisbursed immediately. If profits and losses are allocated on a 2:2: 3: 3 basis, respectively, how will the $ 10,000 be divided? Showyour work.
A, Capital B, Capital C, Capital Reported Balances $ 100,000 $120,000 $ 180,000 Assumed $370,000 loss Potential balancesPotential loss from C's deficit* Current cash distribution *Thesplit is 20/30 or 40%/60% Requirement A: Since the partnershipcurrently has total capital of $260,000, the $10,000 that isavailable would indicate maximum potential losses of $250,000.Adams, Baker, Carvil, Dobbs, Capital Capital Capital CapitalReported Balances Assumed $250,000 loss (2:3:3:2) Potentialbalances Potential loss from deficits (1:1) Current cashdistribution Requirement
1. A partnership has the following capital balances: A ( 20% ofprofits and losses) $ 100,000 B ( 30% of profits and losses) $120,000 C ( 50% of profits and losses) $ 180,000 If the partnershipis to be liquidated and $ 30,000 becomes immediately available, whogets that money? Show your work
| Answer#1 | A | B | C | Total |
| ReportedBalances | 100000 | 120000 | 180000 | 400000 |
| Anticipated loss($370,000) ie 400000-30000 rati 2:3:5 | -74000 | -111000 | -185000 | -370000 |
| Potentialbalances | 26000 | 9000 | -5000 | 30000 |
| Potential lossfrom C's deficit (split 2:3) | -2000 | -3000 | ||
| Currentcash distribution | 24000 | 6000 |
B: Same cash to distribute, different allocations:Adams, Baker, Carvil, Dobbs, Capital Capital Capital CapitalReported Balances Assumed $250,000 loss (2:2:3:3) Potentialbalances, Step 1 Potential loss from deficits (4:6) Potentialbalances, Step 2 Potential loss from deficit (100%) Current cashdistribution.
