The following condensed balance sheet is presented for the partnership of H, I,

Question

The following condensed balance sheet is presented for the partnership of H, I, and J who share profits and losses in the ratio of 4:3:3, respectively:

The partners agree to liquidate the partnership after selling the other assets.

Refer to the above information. If the other assets are sold for $200,000, how much should J receive upon liquidation?

$20,000

$30,000

$50,000

$15,000

Cash $ 50,000 Other Assets 300,000 Total $ 350,000 Liabilities $ 80,000 H, Capital 150,000 I, Capital 70,000 J, Capital 50,000 Total $ 350,000

Explanation / Answer

Calculate amount distribution :

So answer is a) $20000

H, capital I, capital J, capital Total Profit and loss distribution on sale of other assets -40000 -30000 -30000 -100000 Capital balance before loss distribution 150000 70000 50000 270000 Adjusted capital balance 110000 40000 20000 170000 Remaining amount distributed (200000+50000-80000) 110000 40000 20000 170000

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