Question

A partnership has liquidated all assets but still reports the following account balances:

Beck, loan	$	6,000
Cisneros, capital (40%)		3,600
Beck, capital (20%)		(13,200	)	(deficit)
Sadak, capital (10%)		(9,200	)	(deficit)
Emerson, capital (20%)		18,000
Page, capital (10%)		(7,200	)	(deficit)

The partners split profits and losses as follows: Cisneros, 40 percent; Beck, 20 percent; Sadak, 10 percent; Emerson, 20 percent; and Page 10 percent.

Assuming that all partners are personally insolvent except for Sadak and Emerson, how much cash must Sadak now contribute to this partnership? (Do not round intermediate calculations. Round the final answer to nearest dollar amounts.)

Answer 1

				Capital Balance
	Ratio	Weight	Share	Before adjustment	After Adjustment
	(a)	(b)	(c) = (b) X -$14,400	(d)	(c) + (d)
Cisneros	40%	(40%/70%)	$                -8,228.57	$           3,600	$                      -4,629
Sadak	10%	(10%/70%)	$                -2,057.14	$         -9,200	$                   -11,257
Emerson	20%	(20%/70%)	$                -4,114.29	$         18,000	$                     13,886
Total	70%		$                   -14,400	$         12,400
	Total Deficit after setting off the loan amount of Beck:
	Beck, loan	=	$                       6,000
	Beck, capital	=	$                   -13,200
	Page, capital	=	$                      -7,200
	Total Deficit	=	$                   -14,400
	Note: Deficit shall include the deficit of personally insolvent partners
				Capital Balance
	Ratio	Weight	Share	Before adjustment	After Adjustment
	(a)	(b)	(c) = (b) X -$4,629	(d)	(c) + (d)
Sadak	10%	(10%/30%)	$                      -1,543	$       -11,257	$                   -12,800
Emerson	20%	(20%/30%)	$                      -3,086	$         13,886	$                     10,800
Total	30%		$                      -4,629	$           2,629
	Therefore, Sadak shall contribute $12,800