A partnership is considering possible liquidation because one of the partners (Bell) is personally insolvent. Profits and losses are divided on a 4:3:2:1 basis, respectively. Capital balances at the current time are Bell, capital $ 111,000 Hardy, capital 93,000 Dennard, capital 10,000 Suddath, capital 104,000 Bell’s creditors have filed a $45,000 claim against the partnership’s assets. The partnership currently holds assets of $540,000 and liabilities of $222,000. If the assets can be sold for $310,000, what is the minimum amount that Bell’s creditors would receive? Multiple Choice $1,000 $4,600 $0 $19,000
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
A
| Bell, capital | $ | 111,000 |
| Hardy, capital | 93,000 | |
| Dennard, capital | 10,000 | |
| Suddath, capital | 104,000 | |
Bell’s creditors have filed a $45,000 claim against the partnership’s assets. The partnership currently holds assets of $540,000 and liabilities of $222,000. If the assets can be sold for $310,000, what is the minimum amount that Bell’s creditors would receive?
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$1,000
-
$4,600
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$0
-
$19,000
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