A partnership has gone through liquidation and now reports the following account balances: Cash . . . . . . . . . . . . . . . . . . . . . .$16,000Loan from Jones . . . . . . . . . . 3,000Wayman, capital . . . . (2,000) (deficit)Jones, capital . . . . . . . (5,000) (deficit)Fuller, capital . . . . . . . . . . . . . 13,000Rogers, capital . . . . . . . . . . . . 7,000 Profits and losses are allocated on the following basis: Wayman, 30 percent; Jones, 20 percent; Fuller, 30 percent; and Rogers, 20 percent. Which of the following events should occur now?a. Jones should receive $3,000 cash because of the loan balance.b. Fuller should receive $11,800 and Rogers $4,200.c. Fuller should receive $10,600 and Rogers $5,400.d. Jones should receive $3,000, Fuller $8,800, and Rogers $4,200.
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
Cash . . . . . . . . . . . . . . . . . . . . . .$16,000
Loan from Jones . . . . . . . . . . 3,000
Wayman, capital . . . . (2,000) (deficit)
Jones, capital . . . . . . . (5,000) (deficit)
Fuller, capital . . . . . . . . . . . . . 13,000
Rogers, capital . . . . . . . . . . . . 7,000
a. Jones should receive $3,000 cash because of the loan balance.
b. Fuller should receive $11,800 and Rogers $4,200.
c. Fuller should receive $10,600 and Rogers $5,400.
d. Jones should receive $3,000, Fuller $8,800, and Rogers $4,200.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
