Joe, Jim, and Jay have been partners for several years. The partners allocate all profits and...

Assets			Liabilities and Capital
Cash	$	35,000	Liabilities	$	131,000
Accounts receivable		132,000	Joe, capital		60,000
Inventory		122,000	Jim, capital		99,000
Land, building, and equipment (net)		71,000	Jay, capital		70,000
Total assets	$	360,000	Total liabilities and capital	$	360,000

Required:

Sold remaining accounts receivable for 35 percent of face value (2 points).
Sold land, building, and equipment for $41,000 (1 point).
Paid all remaining liabilities of the partnership (1 point).
Distributed cash held by the business to the partners (2 points).

Solutions

Expert Solution

As they are partners we divide their partnership ratio respectively:

Accounts Receivable:

35% of face value= 132000*35/100=46200

Joe= 46200*4/10=18480

Jim= 46200*4/10=18480

Jay= 46200*2/10=9240

Land, building & Equipment= 41000

Joe=41000*4/10=16400

Jim=41000*4/10=16400

Jay=41000*2/10=8200

Liabilities=131000

Joe=131000*4/10=52400

Jay=131000*4/10=52400

Jim=131000*2/10=26200

Cash=35000

Joe=35000*4/10=14000

Jay=35000*4/10=14000

Jim=35000*2/10=7000

Hence all partners distributed their shares according to the partnership sharing ratio.

ekkarill92 answered 2 years ago

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