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A partnership has the following account balances: Cash, $76,000; Other Assets, $570,000; Liabilities, $258,000; Nixon (50...

A partnership has the following account balances: Cash, $76,000; Other Assets, $570,000; Liabilities, $258,000; Nixon (50 percent of profits and losses), $180,000; Cleveland (30 percent), $130,000; Pierce (20 percent), $78,000. The company liquidates, and $16,500 becomes available to the partners. Who gets the $16,500? Determine how much of this amount should be distributed to each partner.(Do not round intermediate calculations.)

Safe Payments: Nixon? Cleveland? Pierce?

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Answer #1
  • Working

Nixon (50%)

Cleaveland (30%)

Pierce (20%)

Total

Capital balance

$180,000

$130,000

$78,000

$388,000

Available cash balance

($16,500)

Potential loss

$371,500

Allocation of potential loss in profit sharing ratio 50%, 30%, 20%

($185,750)

($111,450)

($74,300)

($371,500)

Available balance

($5,750)

$18,550

$3,700

$16,500

Deficiency of Nixon

$5,750

($3,450) [5750 x 30/50]

($2,300) [5750 x 20/50]

$0

Safe Payments

$0

$15,100

$1,400

$16,500

  • Answer

Amount distributed to:
Nixon = $ 0
Cleveland = $ 15,500
Pierce = $ 1400

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