Question

A local dental partnership has been liquidated and the final capital balances are as follows: Atkinson,...

A local dental partnership has been liquidated and the final capital balances are as follows:

Atkinson, capital (40% of all profits and losses) $ 67,000
Kaporale, capital (30%) 27,000
Dennsmore, capital (20%) (54,000 )
Rasputin, capital (10%) (40,000 )

If Rasputin contributes additional cash of $24,000 to the partnership, what should happen to it?

Homework Answers

Answer #1
Atkinson Kaporale Dennsmore Rasputin
Reported balances capital contribution $67,000 $27,000 ($54,000) ($40,000)
Capital Contribution $0 $0 $0 $24,000
Adjusted balances $67,000 $27,000 ($54,000) ($16,000)
Potential lossfrom Dennsmore and Rasputin($70000) split on a 4:3 basis ($40,000) ($30,000) $54,000 $16,000
Adjusted balances $27,000 ($3,000) $0 $0
Potential lossfrom Kaporale ($3000) ($3,000) $3,000 $0 $0
Cash distribution $ 24,000 $0 $0 $0

The entire $24000 goes to Atkinson.

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