Asked by Laura Bouchie on Apr 27, 2024
Verified
A partnership had the following account balances: Cash, $91,000; Other Assets, $702,000; Liabilities, $338,000; Polk, Capital (50% of profits and losses), $221,000; Garfield, Capital (30%), $143,000; Arthur, Capital (20%), $91,000. The company liquidated and $10,400 became available to the partners.Required:Who would have received the $10,400?
Liquidation
The process of bringing a business to an end and distributing its assets to claimants.
Account Balances
The amounts of money present in or owed on a company's accounts at any given time.
Capital
Capital refers to the financial resources or assets that are used to fund operations, invest in the business, or cover expenses.
- Formulate the disbursement plan of cash and other pertinent assets upon a partnership’s liquidation, taking into account the capital stakes of the partners and their profit and loss ratios.
- Execute the profit and loss sharing percentages to calculate the distinct allocations of profits, losses, and liquidation proceeds for each partner.
Verified Answer
TT
Tasfia TasnimMay 01, 2024
Final Answer :
Since the partnership had total capital of $455,000, the $10,400 that was available would have indicated maximum anticipated losses of $444,600. 
The $10,400 would have gone to Garfield ($8,840) and Arthur ($1,560) .
The $10,400 would have gone to Garfield ($8,840) and Arthur ($1,560) .
Learning Objectives
- Formulate the disbursement plan of cash and other pertinent assets upon a partnership’s liquidation, taking into account the capital stakes of the partners and their profit and loss ratios.
- Execute the profit and loss sharing percentages to calculate the distinct allocations of profits, losses, and liquidation proceeds for each partner.
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