PARTNER BONUS | ||||||||||||||
Old profit sharing ratio of Burns before admission = 100% =1 | ||||||||||||||
Total capital after admission = $118000+$64000 =$182000 | ||||||||||||||
New profit sharing ratio of burns = $118000 / $ 182000 = 0.65 | ||||||||||||||
New profit sharing ratio of Murray = $64000 / $ 182000 = 0.35 | ||||||||||||||
Sacrificing ratio of burns = Old ratio - new ratio = 1- 0.65 = 0.35 | ||||||||||||||
Amount of bonus = $118000 x 0.35 = $ 41300 | ||||||||||||||
Recipient of bonus = Burns | ||||||||||||||
LIDQUATING PARTNERSHIPS | ||||||||||||||
Amount realised on sale of assets = $48000 | ||||||||||||||
Amount of liabilites = $1000 | ||||||||||||||
Therefore, Net assets = $48000 -$1000 = $47000 | ||||||||||||||
Total capital = $16000 +$27000 = $43000 | ||||||||||||||
Excess of net assets over capital that is profit will be shared equally among partners = $47000-$43000= $4000 | ||||||||||||||
Amount of final distribution on liquation of partnership to MacPherson = share of capital +profits share of net assets | ||||||||||||||
= $16000 + half of profits on net assets $4000 = $18000 | ||||||||||||||
LIQUIDATING PARTNERSHIPS -DEFICIENCY | ||||||||||||||
Amount realised on sale of assets = $40000 | ||||||||||||||
Amount of liabilites = NIL | ||||||||||||||
Therefore, Net assets = $40000 -NIL = $40000 | ||||||||||||||
Total capital = $21000 +$79000 = $100000 | ||||||||||||||
Excess of capital over net assets that loss / deficiency on liqudation = $ 100000-$40000= $60000 | ||||||||||||||
The loss is shared equally = $60000/2 = $30000 | ||||||||||||||
Amount of Pepper's deficiney = $21000 -$30000 =($ 9000) | ||||||||||||||
Amount to be distributed to Morrison = $79000 -$30000 = $69000 | ||||||||||||||
Amount to be distributed to Morrison assuming Pepper is unable to satisfy the deficiney (Pepper's deficiency is adjusted) = $69000 - $9000 = $60000 |
Partner Bonus Burns has a capital balance of $118,000 after adjusting assets to fair market value....
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