Determine the amount received by Ellis as a final distribution from liquidation of the partnership.

Prior to liquidating their partnership, Ellis and Dunn had capital accounts of $63,000 and $106,000, respectively. Prior to liquidation, the partnership had no cash assets other than what was realized from the sale of assets. These partnership assets were sold for $188,000. The partnership had $5,000 of liabilities. Ellis and Dunn share income and losses equally.

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Expert Solution

Total Non-cash Assets will be	$ 174,000	=63000+106000+5000

Gain on sale of Non-cash assets	14,000	=188000-174000

Distribution of Gain to partners

Ellis	7,000	=14000/2

Dunn	7,000	=14000/2

Capital Account of Partners after allocation of Gain

Ellis	70,000

Dunn	113,000	=106000+7000

Remaining cash after payment of Liabilities	183,000	=188000-5000


Amount received by Ellis as a final distribution from liquidation of the partnership	$ 70,000

ekkarill92 answered 2 years ago

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