Glass,Falk,and Fayed had a partnership that splits profits and losses equally.Fayed declared his intention to withdraw from the partnership.Partnership assets were revalued and partner capital balances were adjusted to the following amounts: $$\begin{array} { | l | r | }
\hline \text { Glass } & \$ 100,000 \
\hline \text { Falk } & \$ 115,000 \
\hline \text { Fayed } & \$ 90,000 \
\hline
\end{array}$$ Due to a set of unusual legal circumstances,it was mutually agreed that the partnership would settle with Fayed for a cash payment of $100,000.Which of the following statements accurately describes the transaction?

Question

Glass,Falk,and Fayed had a partnership that splits profits and losses equally.Fayed declared his intention to withdraw from the partnership.Partnership assets were revalued and partner capital balances were adjusted to the following amounts: $$\begin{array} { | l | r | } 
\hline \text { Glass } & \$ 100,000 \
\hline \text { Falk } & \$ 115,000 \
\hline \text { Fayed } & \$ 90,000 \
\hline
\end{array}$$ Due to a set of unusual legal circumstances,it was mutually agreed that the partnership would settle with Fayed for a cash payment of $100,000.Which of the following statements accurately describes the transaction?

Quizplus · Accepted Answer

The partnership settled with Fayed for $100,000, which is $10,000 more than his capital balance of $90,000. This excess amount is shared equally by the remaining partners, Glass and Falk, resulting in a $5,000 debit to each of their capital accounts.

Glass,Falk,and Fayed Had a Partnership That Splits Profits and Losses