A local partnership was considering the possibil…
A local partnership was considering the possibility of liquidation. Capital account balances at that time were as follows. Profits and losses were divided on a 4:2:2:2 basis, respectively. Ding, capital $ 60,000 Laurel, capital 67,000 Ezzard, capital 17,000 Tillman, capital 96,000 At that time, the partnership held noncash assets reported at $360,000 and liabilities of $120,000. There was no cash on hand at the time.If the assets could be sold for $228,000 and there are no liquidation expenses, what is the amount that Ding would receive from the liquidation? A) $36,000. B) $0. C) $2,500. D) $38,720. E) $67,250.
Read DetailsGoodman, Pinkman, and White formed a partnership on January…
Goodman, Pinkman, and White formed a partnership on January 1, 2020, and made capital contributions of $125,000 (Goodman), $175,000 (Pinkman), and $250,000 (White), respectively. With respect to the division of income, they agreed to the following: (1) interest of an amount equal to 10% of the that partner’s beginning capital balance for the year; (2) annual compensation of $15,000 to Pinkman; and (3) the remainder of the income or loss to be split among the partners in the following percentages: (a) 20% for Goodman; (b) 40% for Pinkman; and (c) 40% for White. Net income was $200,000 in 2020 and $240,000 in 2021. Each partner withdrew $1,500 for personal use every month during 2020 and 2021.What was Goodman’s capital balance at the end of 2020?
Read DetailsWhich of the following statements is true concerning the dis…
Which of the following statements is true concerning the distribution of safe payments? A) The distribution of safe payments assumes that any capital deficit balances will prove to be a total loss to the partnership. B) Safe payments are equal to the recorded capital account balances of those partners with capital account balances in excess of $0. C) The distribution of safe payments may only be made after all liabilities have been paid. D) In computing safe payments, partners with positive capital account balances are assumed to absorb an equal share of any deficit balance(s). E) There are no safe payments until the liquidation is complete.
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