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: $$\begin{array} { | l | l | }
\hline \text { Partner } & \text { Capital Balance } \
\hline \text { Blau, Capital } & \$ 41,000 \text { Credit } \
\hline \text { Finch, Capital } & \$ 27,000 \text { Credit } \
\hline \text { Fleet, Capital } & \$ 11,000 \text { Debit } \
\hline
\end{array}$$ Assume Fleet contributes 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: $$\begin{array} { | l | l | } 
\hline \text { Partner } & \text { Capital Balance } \
\hline \text { Blau, Capital } & \$ 41,000 \text { Credit } \
\hline \text { Finch, Capital } & \$ 27,000 \text { Credit } \
\hline \text { Fleet, Capital } & \$ 11,000 \text { Debit } \
\hline
\end{array}$$ Assume Fleet contributes the capital deficiency.How much cash is available to distribute to the partners?

Quizplus · Accepted Answer

Fleet needs to contribute $11,000 to cover his capital deficiency, making the total cash available for distribution $41,000 + $27,000 + $11,000 = $79,000. However, since Fleet has to contribute his deficiency, the actual cash available for distribution to the partners (after Fleet's contribution) is $79,000 - $11,000 = $68,000.

A Partnership Is Liquidating Assume Fleet Contributes the Capital Deficiency