A local partnership was in the process of liquidating and reported the following capital balances: $\begin{array}{ll}
\text {Justice, capital (40\% share of all profits and losses) }&\$23,000 \
\text {Zobart, capital ( $ 35 \%) $ }&22,000 \
\text { Douglass, capital ( } 25 \%)&(14,000) \
\end{array}$
Douglass indicated that the $14,000 deficit would be covered by a forthcoming contribution. However, the two remaining partners asked to receive the $31,000 that was then in the cash account. How much of this money should Zobart receive?

Question

A local partnership was in the process of liquidating and reported the following capital balances: $\begin{array}{ll}
\text {Justice, capital (40\% share of all profits and losses) }&\$23,000 \
\text {Zobart, capital ( $ 35 \%) $ }&22,000 \
\text { Douglass, capital ( } 25 \%)&(14,000) \
\end{array}$
 Douglass indicated that the $14,000 deficit would be covered by a forthcoming contribution. However, the two remaining partners asked to receive the $31,000 that was then in the cash account. How much of this money should Zobart receive?

Quizplus · Accepted Answer

Zobart's share of the cash is calculated based on his capital balance and profit-sharing ratio. The total positive capital balance is $23,000 (Justice) + $22,000 (Zobart) = $45,000. Zobart's share is 35% of the total, so $31,000 * (22,000 / 45,000) = $15,467.

A Local Partnership Was in the Process of Liquidating and Reported