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In: Accounting
A partnership has the following account balances: Cash, $76,000; Other Assets, $570,000; Liabilities, $258,000; Nixon (50...
A partnership has the following account balances: Cash, $76,000; Other Assets, $570,000; Liabilities, $258,000; Nixon (50 percent of profits and losses), $180,000; Cleveland (30 percent), $130,000; Pierce (20 percent), $78,000. The company liquidates, and $16,500 becomes available to the partners. Who gets the $16,500? Determine how much of this amount should be distributed to each partner. (Do not round intermediate calculations.)
Nixon Cleveland Pierce
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Expert Solution
The other assets of $540k must have been sold for $198k, because then the $198k plus the original $70k in cash would add up to $268k in cash. $260k of this was used to pay the liabilities, leaving $8k to distribute.
Now we go back to the other assets. The company assumed a loss on the other assets of $342k, which needs to be allocated in the 5:3:2 ratio.
Nixon has $170k capital, and gets assigned 50% of the $342k loss, or $171k, leaving him negative equity of $1k.
Cleveland has $110k capital, and gets assigned 30% of the $342k loss, or $102.6k, leaving him positive equity of $7.4k.
Pierce has $70k capital, and gets assigned 20% of the $342k loss, or $1.6k, leaving him positive equity of $1.6k.
If there is a rule in the partnership agreement that says there can be no negative capital, then the $1k that Nixon owes would be split in a 3:2 ratio, which would result in Cleveland getting $6.8k and Pierce getting $1.2k, but we dont know enough about the partnership agreement to know if this is in place.
ekkarill92 answered 1 year agoRelated Solutions
A partnership has the following account balances: Cash, $95,000; Other Assets, $665,000; Liabilities, $305,000; Nixon (50...
A partnership has the following account balances: Cash, $95,000;
Other Assets, $665,000; Liabilities, $305,000; Nixon (50 percent of
profits and losses), $215,000; Cleveland (30 percent), $150,000;
Pierce (20 percent), $90,000. The company liquidates, and $20,500
becomes available to the partners. Who gets the $20,500? Determine
how much of this amount should be distributed to each
partner.(Do not round intermediate
calculations.)
A partnership has the following account balances: Cash, $70,000; Other Assets, $540,000; Liabilities, $260,000; Nixon (50...
A partnership has the following account balances: Cash, $70,000;
Other Assets, $540,000; Liabilities, $260,000; Nixon (50 percent of
profits and losses), $170,000; Cleveland (30 percent), $110,000;
Pierce (20 percent), $70,000. The company liquidates, and $8,000
becomes available to the partners. Who gets the $8,000? Determine
how much of this amount should be distributed to each
partner.(Do not round intermediate
calculations.)
Nixon
Cleveland
Pierce
Safe payments
The partnership of Hendrick, Mitchum, and Redding has the following account balances: Cash $ 57,000 Liabilities...
The partnership of Hendrick, Mitchum, and Redding has the
following account balances:
Cash
$
57,000
Liabilities
$
36,000
Noncash assets
142,000
Hendrick, capital
108,000
Mitchum, capital
77,000
Redding, capital
(22,000
)
This partnership is being liquidated. Hendrick and Mitchum are
each entitled to 40 percent of all profits and losses with the
remaining 20 percent going to Redding.
What is the maximum amount that Redding might have to contribute
to this partnership because of the deficit capital balance?
How should...
The partnership of Hendrick, Mitchum, and Redding has the following account balances: Cash $ 61,000 Liabilities...
The partnership of Hendrick, Mitchum, and Redding has the
following account balances:
Cash
$
61,000
Liabilities
$
30,000
Noncash assets
160,000
Hendrick, capital
150,000
Mitchum, capital
95,000
Redding, capital
(54,000
)
This partnership is being liquidated. Hendrick and Mitchum are
each entitled to 40 percent of all profits and losses with the
remaining 20 percent going to Redding.
What is the maximum amount that Redding might have to contribute
to this partnership because of the deficit capital balance?
How should...
A partnership has the following account balances at the date of termination: Cash, $96,000; Noncash Assets,...
A partnership has the following account balances at the date of
termination: Cash, $96,000; Noncash Assets, $740,000; Liabilities,
$494,000; Bell, capital (50 percent of profits and losses),
$160,000; Mann, capital (30 percent), $110,000; Scott, capital (20
percent), $72,000. The following transactions occur during
liquidation:
Noncash assets with a book value of $580,000 are sold for
$480,000 in cash.
A creditor reduces his claim against the partnership from
$160,000 to $130,000, and this amount is paid in cash.
The remaining noncash...
The Casinova Corp. has provided the following account balances: Cash $76,000; Short-term investments $8,000; Accounts receivable...
The Casinova Corp. has
provided the following account balances:
Cash $76,000;
Short-term investments
$8,000;
Accounts receivable
$96,000;
Supplies $12,000;
Long-term notes
receivable $4,000;
Equipment
$192,000;
Factory Building
$360,000;
Intangible assets
$12,000;
Accounts payable
$90,000;
Accrued liabilities
payable $12,000;
Short-term notes
payable $42,000;
Long-term notes
payable $184,000.
What is Casinova's
current ratio?
A partnership has liquidated all assets but still reports the following account balances: Beck, loan $...
A partnership has liquidated all assets but still reports the
following account balances:
Beck, loan
$
9,000
Cisneros, capital (40%)
4,800
Beck, capital (20%)
(9,600
)
(deficit)
Sadak, capital (10%)
(10,400
)
(deficit)
Emerson, capital (20%)
15,600
Page, capital (10%)
(15,000
)
(deficit)
The partners split profits and losses as follows: Cisneros, 40
percent; Beck, 20 percent; Sadak, 10 percent; Emerson, 20 percent;
and Page 10 percent.
Assuming that all partners are personally insolvent except for
Sadak and Emerson, how...
A partnership has liquidated all assets but still reports the following account balances: The partners split...
A partnership has liquidated all assets but still reports the following account balances:
The partners split profits and losses as follows: Cisneros, 40 percent; Beck, 20 percent; Sadak, 10 percent; Emerson, 20 percent; and Page 10 percent.
Assuming that all partners are personally insolvent except for Sadak and Emerson, how much cash must Sadak now contribute to this partnership?
A partnership has liquidated all assets but still reports the following account balances: Beck, loan $...
A partnership has liquidated all assets but still reports the
following account balances:
Beck, loan
$
5,500
Cisneros, capital (40%)
3,600
Beck, capital (20%)
(12,200
)
(deficit)
Sadak, capital (10%)
(8,200
)
(deficit)
Emerson, capital (20%)
15,500
Page, capital (10%)
(6,200
)
(deficit)
The partners split profits and losses as follows: Cisneros, 40
percent; Beck, 20 percent; Sadak, 10 percent; Emerson, 20 percent;
and Page 10 percent.
Assuming that all partners are personally insolvent except for
Sadak and Emerson, how...
A partnership has liquidated all assets but still reports the following account balances: Beck, loan $...
A partnership has liquidated all assets but still reports the
following account balances:
Beck, loan
$
6,000
Cisneros, capital (40%)
3,900
Beck, capital (20%)
(12,300
)
(deficit)
Sadak, capital (10%)
(8,300
)
(deficit)
Emerson, capital (20%)
15,000
Page, capital (10%)
(6,300
)
(deficit)
The partners split profits and losses as follows: Cisneros, 40
percent; Beck, 20 percent; Sadak, 10 percent; Emerson, 20 percent;
and Page 10 percent.
Assuming that all partners are personally insolvent except for
Sadak and Emerson, how...
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