Liquidating Partnerships—Deficiency Prior to liquidating their partnership, Short and Reynell had capital accounts of $24,000 and $99,000, respectively. The partnership assets were sold for $47,000. The partnership had no liabilities. Short and Reynell share income and losses equally. Required:
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.
Liquidating Partnerships—Deficiency
Prior to liquidating their
Required:
a. Determine the amount of Short's deficiency.
$fill in the blank 1
b. Determine the amount distributed to Reynell, assuming that Short is unable to satisfy the deficiency.
$fill in the blank 2
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
