Bilbo, Frodo and Gandoff have had a successful law practice for many years, but
ID: 2473797 • Letter: B
Question
Bilbo, Frodo and Gandoff have had a successful law practice for many years, but have decided to retire and move to Rivendale. On January 1, 2015 when the 3 of them decided to terminate the partnership they had the following balance sheet:
Cash $50,000
A/R $90,000
Supplies $40,000
Equipment (net) $100,000
Building (net) $400,000
Land $300,000
Note payable $200,000
Accounts payable $200,000
Gandoff capital $80,000
Bilbo capital $300,000
Frodo capital $600,000
They share profits and losses equally.
What if any safe payments can each of the partners take on January 1, 2016?
On January 31 the partnership sold the supplies for $35000. After this sale, what if any safe payments can each of the partners take on January 31 (assume no safe payments have been taken before this date)
Explanation / Answer
Total Assets 980000 Liabilties 400,000 Balance 580,000 Each parner can take 193,333 If partner ship sold Supplies Total Assets 940000 Liabilties 400,000 Balance 540,000 Each parner can take 180,000
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