Z and Y formed ZY Partnership in 2016. Z contributed $300,000 and Y contributedS200,000 to the partnership capital. They share profits and losses of the partnership in theratio of their capital contribution. The partners are entitled to 15% interest on the capitalscontributed by themThe partnership had $50,000 of liabilities at the beginning of 2017. During 2017, itborrowed $120,000 from Puma Bank on nonrecourse basis. For the year 2017, thepartnership incurred an ordinary loss of $200,000.How much loss will Z and Y recognize for 2017?a. Z - $120,000; Y - 80,000b. Z - $165.000: Y - $110.000c. Z - $192,000; Y - $128,000d. Z- $222.000: Y - $148.000

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Asked Aug 1, 2019
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Z and Y formed ZY Partnership in 2016. Z contributed $300,000 and Y contributed
S200,000 to the partnership capital. They share profits and losses of the partnership in the
ratio of their capital contribution. The partners are entitled to 15% interest on the capitals
contributed by them
The partnership had $50,000 of liabilities at the beginning of 2017. During 2017, it
borrowed $120,000 from Puma Bank on nonrecourse basis. For the year 2017, the
partnership incurred an ordinary loss of $200,000.
How much loss will Z and Y recognize for 2017?
a. Z - $120,000; Y - 80,000
b. Z - $165.000: Y - $110.000
c. Z - $192,000; Y - $128,000
d. Z- $222.000: Y - $148.000
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Z and Y formed ZY Partnership in 2016. Z contributed $300,000 and Y contributed S200,000 to the partnership capital. They share profits and losses of the partnership in the ratio of their capital contribution. The partners are entitled to 15% interest on the capitals contributed by them The partnership had $50,000 of liabilities at the beginning of 2017. During 2017, it borrowed $120,000 from Puma Bank on nonrecourse basis. For the year 2017, the partnership incurred an ordinary loss of $200,000. How much loss will Z and Y recognize for 2017? a. Z - $120,000; Y - 80,000 b. Z - $165.000: Y - $110.000 c. Z - $192,000; Y - $128,000 d. Z- $222.000: Y - $148.000

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Step 1

Calcuation of share of loss by Partner Z.

 

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Partner Z's share=Loss incurred x| (Proportion of of loss profit or loss =S200,000x 5 = $120,000

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Step 2

Calculation of share of loss by Partner Y.

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Partner Y's share -Loss incurred x/ Proportion of of loss profit or loss 2 =S200,000x- =S80,000

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Step 3

Since, the partners share both the profit and loss in the ratio of capital contribution, t...

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