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Prior to liquidating their partnership, Callie and Russo had capital accounts of $19,000 and $73,000, respectively....

Prior to liquidating their partnership, Callie and Russo had capital accounts of $19,000 and $73,000, respectively. The partnership assets were sold for $36,000. The partnership had no liabilities. Callie and Russo share income and losses equally. Required: a. Determine the amount of Callie's deficiency. $ b. Determine the amount distributed to Russo, assuming Callie is unable to satisfy the deficiency. $

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Answer #1
Particulars Amount
Sale of Assets    36,000.00
Carrying value of assets prior to liquidation(19000+73000) - Since no liabilities were there, partners equity total will be equal to assets of the firm    92,000.00
Loss on liquidation(92000-36000)    56,000.00
Partners Share of loss@ 50%    28,000.00
a Particulars Amount
Callie Equity prior to liquidation    19,000.00
Callie Share of loss on liquidation(56000*50%)    28,000.00
Callies's Deficiency(19000-28000)     -9,000.00
b Particulars Amount
Russo Equity prior to liquidation    73,000.00
Less: Share of liquidation loss(56000*50%) -28,000.00
Less: Callies Deficiency(since russo has to bear callies deficeincy)     -9,000.00
Amount distributed to Russo    36,000.00
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