Following is the balance sheet of the BDO Partnership: Cash $9,000 Liabilities $13,000 Accounts Receivable 36,000 Brink, Capital 47,000 Inventory 31,000 Davis, Capital 28,000 Equipment 65,000 Olsen, Capital 53,000 $141,000 $141,000 The partners share income 40:40:20, respectively. Assume that 70% of the receivables are collected and that inventory with a book value of $14,000 is sold for $9,000. All cash available at this time is to be distributed. Determine the proper distribution of cash, using the safe payment approach. (Round answers to 0 decimal places, e.g. 5,125. Enter credit balance of an account and credit posting to an account with negative sign preceding the number, e.g. -45 or parentheses, e.g. (45).) Capital Balances Cash Noncash Assets Liabilities Brink 40% Davis 40% Olsen 20% $ $ $ $ $ $ $ $ $ $ $ $
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.
Following is the balance sheet of the BDO
| Cash | $9,000 | Liabilities | $13,000 | |||
| 36,000 | Brink, Capital | 47,000 | ||||
| Inventory | 31,000 | Davis, Capital | 28,000 | |||
| Equipment | 65,000 | Olsen, Capital | 53,000 | |||
| $141,000 | $141,000 |
The partners share income 40:40:20, respectively. Assume that 70% of the receivables are collected and that inventory with a book value of $14,000 is sold for $9,000. All cash available at this time is to be distributed.
Determine the proper distribution of cash, using the safe payment approach. (Round answers to 0 decimal places, e.g. 5,125. Enter credit balance of an account and credit posting to an account with negative sign preceding the number, e.g. -45 or parentheses, e.g. (45).)
| Capital Balances | ||||||||||||
| Cash | Noncash Assets |
Liabilities | Brink 40% |
Davis 40% |
Olsen 20% |
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