Question

The SAD partnership is to be liquidated. The income ratios for partners Sawyer, Adams, and Darby are 6:3:1, respectively. Ass

please explain where these numbers are coming from, the computations done to arrive at these numbers and the two ways to settle a capital deficiency

The SAD partnership is to be liquidated. The income ratios for partners Sawyer, Adams, and Darby are 6:3:1, respectively. Ass

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Answer #1
1 Labels here Cash Non cash assets = Liabilities Sawyer capital Adam's capital Darby's capital
$ 15,000.00 $       80,000.00 $ 20,000.00 $    30,000.00 $    40,000.00 $       5,000.00
Realized from non-cash assets $       50,000.00
Loss on realization $      (30,000.00)
Balance $ 65,000.00
Less: liabilities paid $(20,000.00) $ 20,000.00
Balance $ 45,000.00 45000 0 $               -   $    30,000.00 $    40,000.00 $       5,000.00
Loss on realization( distributed in 6:3:1) $   (18,000.00) $     (9,000.00) $     (3,000.00)
Balance $ 45,000.00 $               -   $    12,000.00 $    31,000.00 $       2,000.00
Distribued between partners according $(45,000.00) $   (12,000.00) $   (31,000.00) $     (2,000.00)
to their capitals
Balance $               -   $                      -   $               -   $                   -   $                   -   $                   -  
Extra Credit
1 The partners in Debt have to pay to the company to cover the Capital deficieny
2 The partners covers the deficieny by adjusting it with their capital balances
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