X and Y are equal partners in the XY partnership and share profits an$ losses ac
ID: 2618815 • Letter: X
Question
X and Y are equal partners in the XY partnership and share profits an$ losses accordingly. At the end of 20x1 the partnerships capital accounts reflect the following number due to a special allocation of depreciationCapital X. Capital Y ($20000). $60000
All assets are sold for $40000 how will the liquidation affect X if the special allocation is to be respected?
A X contributes $20000 and receives $30000 B X contributes $20000 and receives nothing C X contributes nothing D X receives nothing X and Y are equal partners in the XY partnership and share profits an$ losses accordingly. At the end of 20x1 the partnerships capital accounts reflect the following number due to a special allocation of depreciation
Capital X. Capital Y ($20000). $60000
All assets are sold for $40000 how will the liquidation affect X if the special allocation is to be respected?
A X contributes $20000 and receives $30000 B X contributes $20000 and receives nothing C X contributes nothing D X receives nothing
Capital X. Capital Y ($20000). $60000
All assets are sold for $40000 how will the liquidation affect X if the special allocation is to be respected?
A X contributes $20000 and receives $30000 B X contributes $20000 and receives nothing C X contributes nothing D X receives nothing
Explanation / Answer
Option b is correct..
Since Capital of X = -20,000
and capital of Y = 60,000
The ratio will be determined based on their capital accounts
Since X capital contribution is -negative it has to contribute 20,000 and on liquidation will receive nnothin.
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