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

Solutions

Expert Solution

Beck,Sadack and Page has deficit balances
But,Sadak is not an insolvent
Hece,deficit of Beck and page:
$ $
Beck, capital -9600
Beck,loan 9000 -600
Page, capital -15000
Total deficit -15600
Loss of $15600 has to be absorbed by Cisneros,Sadak and Emerson @ 40:10:20
Share of loss:
$
Cisneros 15600*(40/70) 8914
Sadak 15600*(10/70) 2229
Emerson 15600*(20/70) 4457
15600
New capital balances:
Beg. Bal Share of
loss		 New bal.
Cisneros 4800 8914 -4114
Sadak -10400 2229 -12629
Emerson 15600 4457 11143
Cisneros loss of $ 4114 has to be borne by Sadak and emerson @ 10:20
Share of loss:
$
Sadak 4114*(10/30) 1371
Emerson 4114*(20/30) 2743
Total 4114
New capital balances:
Beg. Bal Share of
loss		 New bal.
Sadak -12629 1371 -14000
Emerson 11143 2743 8400
Sadak has to contribute $ 14000

ekkarill92 answered 2 years ago
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