Alex Bob and Ciera are partners sharing income 2:1:2. After selling all of the assets for cash dividing gains and losses on realization and paying liabilities the balances in the capital accounts are as follows: Alex $10000 Cr; Bob $10000 Cr; and Ciera $30000 Cr. How much cash should be distributed to Alex?

Question

Quizplus · Accepted Answer

The total capital in the partnership is $50000 (2+1+2=5 shares, total income divided by 5 equals $10000 per share). Alex owns 2 shares, so his share of the capital is $20000 (2 shares x $10000 per share), but he already has a credit balance of $10000, so he is entitled to receive $10000 ($20000 share of capital - $10000 existing credit balance).

Alex Bob and Ciera Are Partners Sharing Income 2:1:2