Question

D, E & F are partners. According to the articles of co-partnership they agree to share...

D, E & F are partners. According to the articles of co-partnership they agree to share profit and loss in the ratio of 40%, 40% and 20%. The partners have agreed to liquidate. Prior to liquidation the following balance were available:

Cash

$80,000

Non-cash Assets

$400,000

Notes Payable to E

$24,000

Other liabilities

$330,000

D Capital

$80,000

E Capital

$36,000

F Capital

$10,000

Instructions: Please indicate the amounts of who gets paid and how much each partner gets paid.

Please show all computations. Thanks.

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Answer #1

Schedule of cash distribution

Beginning cash balance 80,000
Cash received from sale of non cash assets 400,000
Total cash available 480,000
Less: Payment made for note payable to E - 24,000
Less: Payment made for other liabilities - 330,000
Cash available for distribution among partners $126,000
Less: Payment of capital of D - 80,000
Less: Payment of capital of E - 36,000
Less: Payment of capital of F - 10,000
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