Bracken, Louden, and Menser, who share profits and losses in a ratio of 6:3:3, r

Question

Bracken, Louden, and Menser, who share profits and losses in a ratio of 6:3:3, respectively are partners in a home decorating business that has not been able to generate the income the partners had hoped for. They have decided to liquidate the business and have sold all assets except for their decorating equipment. All partnership liabilities have been settled and all the partners are personally insolvent. The decorating equipment has a book value of $53,600, and the partners have capital account balances as follows:

Determine the amount of cash each partner will receive as a liquidating distribution if the decorating equipment is sold for the amount stated in each of the following independent cases (Do not round intermediate calculations):

a. $44,000.

b. 35,000

c. 24,800

Please Show how you found each result. Thank You!

Bracken, Louden, and Menser, who share profits and losses in a ratio of 6:3:3, respectively are partners in a home decorating business that has not been able to generate the income the partners had hoped for. They have decided to liquidate the business and have sold all assets except for their decorating equipment. All partnership liabilities have been settled and all the partners are personally insolvent. The decorating equipment has a book value of $53,600, and the partners have capital account balances as follows:

Explanation / Answer

a)

Loss on  decorating equipment = 53600 - 44000 = 9600

Loss would be shared in the ratio of 6: 3:3

b)

Loss on  decorating equipment = 53600 - 35000 = 18600

Loss would be shared in the ratio of 6: 3:3

After sale of equipment

Deficiency of partner should be shared in the ratio of capital balance outstanding

Bracken = 900*32550/(32550+3350) = 816

Menser = 900*3350/(32550+3350) = 84

c)

Loss on  decorating equipment = 53600 - 24800 = 28800

Loss would be shared in the ratio of 6: 3:3

After sale of equipment

Deficiency of partner should be shared in the ratio of capital balance outstanding

Bracken = 3450*27450/(27450+800) = 3352

Menser = 3450*800/(27450+800) = 98

Cash + Equipment = Bracken, capital + Louden, capital + Menser, capital Balance 0 + 53600 = 41850 + 3750 + 8000 Sale of Equipment 44000 + -53600 = -4800 + -2400 + -2400 44000 + 0 = 37050 + 1350 + 5600 Cash Distrbution to each partner -44000 + 0 = -37050 + -1350 + -5600

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.