On June 30, Year 5, the balance sheet for the Coll, Maduro & Prieto Partnership
ID: 2537456 • Letter: O
Question
On June 30, Year 5, the balance sheet for the Coll, Maduro & Prieto Partnership (along with the income-sharing ratio) was as follows: Total Assets $180,000 Coll, capital (20%) 51,000 Maduro, capital (20%) 39,000 Prieto, capital (60%) 90,000 Total Liabilities/Capital $180,000 Coll decided to retire from the partnership. It was agreed that the partnership would pay Coll $54,000 cash for Coll’s partnership interest. The bonus method is to be used. After Coll’s retirement, what is the balance of Maduro’s capital account?
$39,250
$38,250
$37,500
$38,400
$39,250
$38,250
$37,500
$38,400
Explanation / Answer
So, balance of Maduro’s capital account is b. $38,250
Capital of Old partners 180,000 Less: paid to Coll 54,000 126,000 Coll's share 51,000 Paid to Coll 54,000 Coll's share 51,000 Bonus to Remaining partners -3,000 Maduro's capital balance before Coll's retirement is 39,000 Maduro's capital balance after Coll's retirement is 39,000- (3,000*20/80) 38,250Related Questions
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