The Abrams, Bartle, and Creighton partnership began the process of liquidation with the following balance sheet: Abrams, Bartle, and Creighton share profits and losses in a ratio of 3:2:5. Liquidation expenses are expected to be $12,000. After the liquidation expenses of $12,000 were paid and the noncash assets sold, Creighton had a deficit of $8,000. For what amount were the noncash assets sold?

Question

The Abrams, Bartle, and Creighton partnership began the process of liquidation with the following balance sheet:  Abrams, Bartle, and Creighton share profits and losses in a ratio of 3:2:5. Liquidation expenses are expected to be $12,000. After the liquidation expenses of $12,000 were paid and the noncash assets sold, Creighton had a deficit of $8,000. For what amount were the noncash assets sold?

Quizplus · Accepted Answer

[Non-Cash Assets BV $434,000 - Cash Received $170,000] + Liquidation Expenses $12,000 = Loss on Non-Cash Assets ($276,000) × 50% = Loss to Abrams ($138,000) - Capital Balance $130,000 = Creighton's Contribution to Cover $8,000

The Abrams, Bartle, and Creighton Partnership Began the Process of Liquidation