Question

The following balance sheet is for a local partnership in which the partners have become very unhappy with each other.

Cash	$	52,000		Liabilities	$	42,000
Land		190,000		Adams, capital		120,500
Building		180,000		Baker, capital		45,000
				Carvil, capital		84,000
				Dobbs, capital		130,500
Total assets	$	422,000		Total liabilities and capital	$	422,000

The building is immediately sold for $97,000 to give total cash of $149,000. The liabilities are then paid, leaving a cash balance of $107,000. This cash is to be distributed to the partners. How much of this money will each partner receive if profits and losses are allocated to Adams, Baker, Carvil, and Dobbs on a 1:3:3:3 basis, respectively? (Do not round intermediate calculations.)

Assume that profits and losses are allocated to Adams, Baker, Carvil, and Dobbs on a 1:3:4:2 basis, respectively. How much money must the firm receive from selling the land and building to ensure that Carvil receives a portion?

Answer 1

to And How much of this money will each partner receive if profits and losses are allocated Adams, Baker, carvil & wobbs on a 1:3 3:3 basis respectively. In the given problem, only building was sold and the land is not sold therefore it is treated as a loss to the partners. Particulary | cash and Building | Liabilities / Adams I Baker carvil I wobbs I I capital capital capital capital Balance as $52.000 $190.000 $180.000 $12,000 $180.500 pel Balance $5,000 $86,000 $130,500 sheet Building sold $97.000 ($97.000) $169.000 190.000 ($83.000) $62,000 $120,500 $25,000 $86.000 $180, 500 $(27,300) ($81,900)| ($81,900) ($ 81,900) land & cuilding loss framfelved $ to capital tiles ($190,000+$83000) cash paid to liabilities $42000) $42000) 493200 €36,900 $2,100 $45,600 Balance $ 107,000 to cash to be received from Baker - $36,900 and cash to be dutributed Adams - $93.200, carvil- $2,100 & wobbs- $248,600.

> Nissaimne that profits and losees are allocated to Adamu, Baker, coavil and polobe on a 1:3:12 basis gespectively. How much money meet the firm receive from selling the land and building to ensure that carvil receives a portion. Total cash balance - $ 52,000 Total liabilities $ 42,000 Balance coch available $ 10.000 $380,000 $ 370,000 Total capitals balances ($120,500+ $ 25.000+ $ 86.000+ $ 130,500) Balance cash geavid to distribute to partners C$380,000-$10,000) land and Buildings partners recewes for $370,000 to Enecure that all sold should be à portion.