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A partnership has the following account balances: Cash, $80,000; Other Assets, $590,000; Liabilities, $248,000; Nixon (50...

A partnership has the following account balances: Cash, $80,000; Other Assets, $590,000; Liabilities, $248,000; Nixon (50 percent of profits and losses), $200,000; Cleveland (30 percent), $135,000; Pierce (20 percent), $87,000. The company liquidates, and $18,500 becomes available to the partners. Who gets the $18,500? Determine how much of this amount should be distributed to each partner.(Do not round intermediate calculations.)

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Answer #1
Total capital of the partnership = 200000+135000+87000 = 422000
Amount available 18500
Maximum loss (422000-18500) 403500
Distribution would be made as below: Nixon Cleveland Pierce Total
Reported balance 200000 135000 87000 422000
Share of maximum loss in the ratio of 5:3:2 201750 121050 80700 403500
Potential balance -1750 13950 6300 18500
Distribution of potential loss of Nixon to Cleveland and Pierce in the ratio of 3:2 1750 -1050 -700 0
Amount to be distributed 0 12900 5600 18500
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