Liquidating Partnerships-Deficiency Prior to liquidating their partnership, Short and Russo had capital accounts of...

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Liquidating Partnerships-Deficiency Prior to liquidating their partnership, Short and Russo had capital accounts of $22,000 a

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Answer 1

Answer #1

Solution a:

Loss on liquidation = Cash realized - Capital balances = $37,000 - ($22,000 + $83,000) = -$68,000

Capital balance of short after distribution of loss = $22,000 - ($68,000/2) = $12,000 debit

Therefore amount of short deficiency = $12,000

Solution b:

If short unable to satisfy the deficiency, then amount distributed to Russo = Cash balance available = $37,000

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Answer 2

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