Hanson, James, and Smith, a partnership, is in the process of liquidating. The partners have the following capital account balances; $48,000, $48,000, and ($18,000) respectively.
Hanson, James, and Smith, a partnership, is in the process of liquidating. The partners have the following capital account balances; $48,000, $48,000, and ($18,000) respectively. The partners share all profits and losses 16%, 48%, and 36%, respectively. Smith has indicated that the ($18,000) deficit will be covered with a forthcoming contribution. The remaining partners have requested an immediate distribution of $40,000 in cash that is available. How should this cash be distributed??
A) Hanson $10,000; James $30,000.
B) Hanson $34,000; James $6,000.
C) Hanson $22,308; James $17,692.
D) Hanson $28,594; James $11,406.
E) Hanson $25,000; James $15,000.
Homework Answers
Hanson | James | Smith |
48,000 | 48,000 | -18,000 |
16% | 48% | 36% |
-18,000 | ||
40,000 | ||
16/(16+48%)=25.00% | 48/(16+48%)=75.00% | |
48,000+48,000+40,000=136,000 | ||
136,000*25%=34,000 | 136,000*75%=102,000 | |
48,000+48,000=96,000 | ||
6,000 |
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