A partnership is liquidating.The partners share profits and losses equally.After liquidating the assets and paying the liabilities,the partners' capital accounts are as follows: $$\begin{array} { | l | l | }
\hline \text { Partner } & \text { Capital Balance } \
\hline \text { Blaine, Capital } & \$ 43,000 \text { Credit } \
\hline \text { Farmer, Capital } & \$ 20,000 \text { Credit } \
\hline \text { Fleet, Capital } & \$ 14,000 \text { Debit } \
\hline
\end{array}$$ Assume Fleet does not contribute the capital deficiency.How much cash is available to distribute to the partners?

Question

A partnership is liquidating.The partners share profits and losses equally.After liquidating the assets and paying the liabilities,the partners' capital accounts are as follows: $$\begin{array} { | l | l | } 
\hline \text { Partner } & \text { Capital Balance } \
\hline \text { Blaine, Capital } & \$ 43,000 \text { Credit } \
\hline \text { Farmer, Capital } & \$ 20,000 \text { Credit } \
\hline \text { Fleet, Capital } & \$ 14,000 \text { Debit } \
\hline
\end{array}$$ Assume Fleet does not contribute the capital deficiency.How much cash is available to distribute to the partners?

Quizplus · Accepted Answer

The total cash available for distribution is calculated by adding the credit balances and subtracting the debit balance. Blaine has $43,000, Farmer has $20,000, and Fleet has a $14,000 debit balance. So, $43,000 + $20,000 - $14,000 = $49,000.

A Partnership Is Liquidating Assume Fleet Does Not Contribute the Capital Deficiency