vitas
Sep 22, 2008, 09:42 AM
I have the problem and the answer but I don't have the derivation.I followed the example in the textbook and rechecked my calculations but I stillget a different answer.
Here is the problem with the correct answer: I need to know how they arrive at this answer.
The ABC Partnership decided to terminate its affairs as of December 31, 2008. The following information is taken from the balance sheet that was prepared as of the date of termination :
Cash $200,000 Liabilities $80,000
Receivables(net) $240,000 A,Capital (30%) $580,000
Inventories $180,000 B,Capital (20%) $360,000
Fixed Assets(net) $580,000 C,Capital (50%) $80,000
Total Assets $1,100,000 Total Liabilities & Capital $1,100,000
Partners A,B, and C share profits and losses 30:20:50 ,respectively.
The noncash assets were sold for $500,000 and partner C was personally insolvent. After paying the outside creditors, how much cash would be distributed to B ? The correct answer is $104,000.
my work:
A B C (i)
cap bal at beg 580,000 360,000 80,000
RATIOS 30% 20% 50%
loss:500,000 allocation
150,000 100,000 250,000
cap bal after allocation of loss
430,000 260,000 -170,000
dist of deficit of insolvent partner
102,000 68,000
cap bal after dist of C 's deficiency
328,000 192,000 0
cash avilable for distribution: 100,000 + 500,000 - 80,000 =520,000
So the answer shoul be 192,000 but the corect answer is 104,000.
Here is the problem with the correct answer: I need to know how they arrive at this answer.
The ABC Partnership decided to terminate its affairs as of December 31, 2008. The following information is taken from the balance sheet that was prepared as of the date of termination :
Cash $200,000 Liabilities $80,000
Receivables(net) $240,000 A,Capital (30%) $580,000
Inventories $180,000 B,Capital (20%) $360,000
Fixed Assets(net) $580,000 C,Capital (50%) $80,000
Total Assets $1,100,000 Total Liabilities & Capital $1,100,000
Partners A,B, and C share profits and losses 30:20:50 ,respectively.
The noncash assets were sold for $500,000 and partner C was personally insolvent. After paying the outside creditors, how much cash would be distributed to B ? The correct answer is $104,000.
my work:
A B C (i)
cap bal at beg 580,000 360,000 80,000
RATIOS 30% 20% 50%
loss:500,000 allocation
150,000 100,000 250,000
cap bal after allocation of loss
430,000 260,000 -170,000
dist of deficit of insolvent partner
102,000 68,000
cap bal after dist of C 's deficiency
328,000 192,000 0
cash avilable for distribution: 100,000 + 500,000 - 80,000 =520,000
So the answer shoul be 192,000 but the corect answer is 104,000.