Question

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 much cash must Sadak now contribute to this partnership? (Do not round intermediate calculations. Round the final answer to nearest dollar amounts.)

Answer 1

				Capital Balance
	Ratio	Weight	Share	Before adjustment	After Adjustment
	(a)	(b)	(c) = (b) X -$12600	(d)	(c) + (d)
Cisneros	40%	(40%/70%)	$                -7,200.00	$           3,900	$                      -3,300
Sadak	10%	(10%/70%)	$                -1,800.00	$         -8,300	$                   -10,100
Emerson	20%	(20%/70%)	$                -3,600.00	$         15,000	$                     11,400
Total	70%		$                   -12,600	$         10,600
	Total Deficit after setting off the loan amount of Beck:
	Beck, loan	=	$                       6,000
	Beck, capital	=	$                   -12,300
	Page, capital	=	$                      -6,300
	Total Deficit	=	$                   -12,600
	Note: Deficit shall include the deficit of personally insolvent partners
				Capital Balance
	Ratio	Weight	Share	Before adjustment	After Adjustment
	(a)	(b)	(c) = (b) X -$3300	(d)	(c) + (d)
Sadak	10%	(10%/30%)	$                      -1,100	$       -10,100	$                   -11,200
Emerson	20%	(20%/30%)	$                      -2,200	$         11,400	$                       9,200
Total	30%		$                      -3,300	$           1,300
	Therefore, Sadak shall contribute $11,200