ion Saved Help Save & Exit Carney, Pierce, Menton, and Hoehn are partners who sh

Question

ion Saved Help Save & Exit Carney, Pierce, Menton, and Hoehn are partners who share profits and losses on a 4:3:21 basis, respectively. They are beginning to liquidate the business. At the start of this process, capital balances are Carney, capital Pierce, capital Menton, capital Hoehn, capital $78,000 32,400 61,000 25,400 Which of the following statements is true? Multiple Choice Carney will be the last partner to receive any evailable cosh he first available $10.200 will go to Menton K Prev 47 of 50Next > 6/23/2 e here to search

Explanation / Answer

Answer is The first available $10200 will go to menton

STATEMENT SHOWING DISTRIBUTION OF SURPLUS

Sl no

Particulars

Carney

Pierce

Menton

Hoehn

1

Capital Balance

78000

32400

61000

25400

2

Profit Sharing Ratio

4

3

2

1

3

Basis capital (1/2)

19500

10800

30500

25400

4

Required Capital taking Pierce basis capital (least) = 10800 * profit sharing ratio (2)

43200

(10800*4)

32400

(10800*3)

21600

(10800*2)

10800

(10800*1)

5

Excess Capital ( 1-4)

34800

(78000-43200)

0

39400

14600

6

Basis Capital ( 5/ 2 )

8700

(34800/4)

-

19700 (39400/2)

14600 (14600/1)

7

Required Capital taking Carney basis capital (least) = 8700 * profit sharing ratio (2)

34800

-

17400

8700

8

Excess Capital ( 5-7)

0

-

22000

5900

9

Basis Capital ( 8 / 2 )

-

-

11000

5900

10

Required Capital taking Hoehm basis capital (least) = 5900 * profit sharing ratio (2)

-

-

11800 (5900*2)

5900 (5900*1)

11

Excess Capital ( 8-10)

-

-

10200

0

So the first available 10200 to be given to Menton

Sl no

Particulars

Carney

Pierce

Menton

Hoehn

1

Capital Balance

78000

32400

61000

25400

2

Profit Sharing Ratio

4

3

2

1

3

Basis capital (1/2)

19500

10800

30500

25400

4

Required Capital taking Pierce basis capital (least) = 10800 * profit sharing ratio (2)

43200

(10800*4)

32400

(10800*3)

21600

(10800*2)

10800

(10800*1)

5

Excess Capital ( 1-4)

34800

(78000-43200)

0

39400

14600

6

Basis Capital ( 5/ 2 )

8700

(34800/4)

-

19700 (39400/2)

14600 (14600/1)

7

Required Capital taking Carney basis capital (least) = 8700 * profit sharing ratio (2)

34800

-

17400

8700

8

Excess Capital ( 5-7)

0

-

22000

5900

9

Basis Capital ( 8 / 2 )

-

-

11000

5900

10

Required Capital taking Hoehm basis capital (least) = 5900 * profit sharing ratio (2)

-

-

11800 (5900*2)

5900 (5900*1)

11

Excess Capital ( 8-10)

-

-

10200

0

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