X and Y are equal partners in the XY Partnership and share profits and losses ac

Q: X and Y are equal partners in the XY Partnership and share profits and losses ac

Solution: If special allocation is to be respected then X will contribute to partnership for deficiency of $20,000 and receives nothing. Hence Option B is the right choice.

ID: 2538700 • Letter: X

Question

X and Y are equal partners in the XY Partnership and share profits and losses accordingly. At the end of 20X1, the partnership's capital accounts reflect the following numbers due to a special allocation of depreciation:

Capital X Capital Y

($20,000) $60,000

All the assets are sold for $40,000. How will the liquidation affect X if the special allocation is to be respected? A. X contributes $20,000 and receives $30,000. B. X contributes $20,000 and receives nothing. C. X contributes nothing. D. X receives nothing.

Explanation / Answer

Solution:

If special allocation is to be respected then X will contribute to partnership for deficiency of $20,000 and receives nothing.

Hence Option B is the right choice.

Navigate

X and Y are equal partners in the XY Partnership and share profits and losses ac

X and Y are equal partners in the XY partnership and share profits an$ losses ac

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

X and Y are equal partners in the XY Partnership and share profits and losses ac

Question

Explanation / Answer

Related Questions

Navigate