Question

The partners' profit and loss sharing ratio is 2:3:5, respectively. D, E, AND F PARTNERSHIP Balance...

The partners' profit and loss sharing ratio is 2:3:5, respectively.

D, E, AND F PARTNERSHIP
Balance Sheet
December 31, 2021
​ Assets Liabilities and Partners' Equity
Cash $35,000 Liabilities $ 40,000
Equipment 90,000 D, Capital 30,000
Accum.dep.–equipment (15,000) E, Capital 25,000
​ F, Capital 15,000
Total $ 110,000 Total $ 110,000


If the D, E, and F Partnership is liquidated by selling the equipment for $45,000 and creditors are paid in full, what is the amount of cash that can be safely distributed to each partner?

D, $24,000; E, $16,000; F, $0

D, $14,000; E, $21,000; F, $5,000

D, $30,000; E, $25,000; F, $15,000

D, $20,000; E, $25,000; F, $5,000
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Homework Answers

Answer #1

Answer:

D, $24,000; E, $16,000; F, $0

Explanation:

Realization Account

Equipment $90000

Liabilities

$40000

Less: Accumulated Dep. $15000

$75000

Sale of Equipment

$45000

Loss on realization:

Payment to Creditor

$40000

(Share between the partner)

D:$30000*2/10 = $6000

E: $30000*3/10 = $9000

F:$30000*5/10 = $15000

$30000

$115000

$115000

Partner’s Capital Account

Particulars

Amount

Particulars

Amount

D

E

F

D

E

F

Loss on realization

$6000

$9000

$15000

Capital Account

$30000

$25000

$15000

Cash Account

$24000

$16000

$0

$30000

$25000

$15000

$30000

$25000

$15000
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