Partnership : It is an organization in which two or more person join together to do a business in which they all share profit and losses in an agreed ratio. One or more partners are acting in behalf of all partners. Each partner is responsible for the act of firm. Requirement-1: To Give: Calculate the loss. Total Loss (C+D) 76000 Calculation of Loss Sale of assets Assets Value (A) 126000 Liabilities Value (B) 78000 Assets cover liabilities of that amount So loss is here (A-B)= C 48000 Excess Liabilities over assets (D) 28000 Total Loss (C+D) 76000 Concept Introduction: Partnership: It is an organization in which two or more person join together to do a business in which they all share profit and losses in an agreed ratio. One or more partners are acting in behalf of all partners. Each partner is responsible for the act of firm. Requirement-2: To Give: Allocate the loss above. Loss Distribution (1:4:5) Partner 1 7600 Partner 2 30400 Partner 3 38000 Total Loss 76000 Concept Introduction: Partnership: It is an organization in which two or more person join together to do a business in which they all share profit and losses in an agreed ratio. One or more partners are acting in behalf of all partners. Each partner is responsible for the act of firm. Requirement-3: To Give: Calculate capital deficiency. Amount contribute by Partners (Capital-Losses) Partner 1 5100 Partner 2 16400 Partner 3 6500 Total Cash Required 28000

Financial Accounting: Information for Decisions

8th Edition

ISBN: 9781259533006

Author: John J Wild

Publisher: McGraw-Hill Education

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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 …

Partner Admission and Withdrawal

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Chapter D, Problem 9E

Chapter D, Problem 11E

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Question #7: Due to the fact that the partnership had been unprofitable for the past several years, A, B, C, and D decided to liquidate their partnership. The partners share profits and losses in the ratio of 30:30:20:20, respectively. The following balance sheet was prepared immediately before the liquidation process began: Cash Other Assets Total Assets ABCD A B C D Partnership Balance Sheet $100,000 550,000 $650,000 The personal status of each partner is as follows: Personal Assets $175,000 100,000 400,000 60,000 Liabilities A, Capital B, Capital C, Capital D, Capital OTHER CASH ASSETS LIABILITIES $100,000 $550,000 $450,000 Total Lia & Equities Personal Liabilities $ 120,000 140,000 160,000 70,000 30 A 75,000 (urm) B $450,000 75,000 60,000 40,000 25,000 $450,000 5-5,000 (40,000) = 240,000 The partnership's other assets are sold for $200,000 cash. The partnership operates in a state which has adopted the Uniform Partnership Act. (10,000) Required: A. Complete the following schedule…

Chapter 16 4. The partnership of Xavier, Yarnell and Zablicki have decided to liquidate their partnership. At the time, the partners share income and loss in the ratio of 2:2:6. No partner can make any payments into the partnership. The partnership sold the noncash assets for $20,000. A. Complete the liquidation schedule below Marshalling of Assets - Simple Liquidation Noncash Y, Beginning balances Sell noncash assets Pay creditors Offset loan Allocated deficit Beginning balances Sell noncash assets Pay creditors Payment to partners B. Now assume the noncash assets were sold for $16,000. Complete the liquidation schedule below Marshalling of Assets - Simple Liquidation Offset loan Allocated deficit Cash Assets Liabilities $5,000 $40,000 $15,000 Payment to partners Cash $5,000 Noncash Assets $40,000 X Y, Loan Capital Capital $2,000 $12,000 $1,000 Liabilities $15,000 Y, Loan X₂ Capital $2,000 $12,000 Y, Capital Z₂ Capital $15,000 $1,000 Z, Capital $15,000

Problem 1 D, E, and F are partners with a profit and loss ratio of 5:4:1, respectively. The partnership is to be liquidated. Prior to the liquidation, the statement of financial position shows the following balances P 80,000 720,000 P 80,000 320,000 240,000 160,000 Cash Liabilities Other Assets D, Capital E, Capital F, Capital After realization, E received P120,000 as settlement of his interest. 1. How much was the loss on the sale of assets? 2. How much did F receive in final settlement of his interest? 3. What amount of total cash was distributed to the partners?

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Solution Summary: The author explains that partnership is an organization in which two or more person join together to do a business and share profit and losses in an agreed ratio.

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