Carney, Pierce, Menton, and Hoehn are partners who share profits and losses on a 4:3:2:1 basis,...


Carney, capital	$	71,000
Pierce, capital		30,300
Menton, capital		54,000
Hoehn, capital		23,300

Which of the following statements is true?

The first available $7,400 will go to Menton.

Carney will be the last partner to receive any available cash.

Carney will collect a portion of any available cash before Hoehn receives money.

The first available $5,300 will go to Hoehn.

Solutions

Expert Solution

particulars	carney	perce	menton	hoehn
capital balance	71000	30300	54000	23300
profit and loss sharing ratio	4	3	2	1
capital balance for one share (capital balance / ratio)	17750	10100	27000	23300

capital which should be (perce)	40400	0	20200	10100

excess capital (capital balance - capital should be)	30600	0	33800	13200

particulars	carney	menton	hoehn
capital balance	71000	54000	23300
profit and loss sharing ratio	4	2	1
capital balance for one share (capital balance / ratio)	17750	27000	23300

capital which should be (carney)	0	35500	17750

excess capital (capital balance - capital which should be)	0	18500	5550

particulars	menton	hoehn
capital balance	54000	23300
profit and loss sharing ratio	2	1
capital balance for one share (capital balance / ratio)	27000	23300

capital which should be (hoehn)	46600	0

excess (capital balance - capital which should be)	7400	0

Therefore, the first available $ 7400 will go to menton.

ekkarill92 answered 1 year ago

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