A local partnership was in the process of liquidating and reported the following capital balances: 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 Justice receive?

Question

A local partnership was in the process of liquidating and reported the following capital balances:  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 Justice receive?

Quizplus · Accepted Answer

Douglass' Deficit ($14,000) × (.40/.75) = ($7,467) + Justice's Capital Balance $23,000 = $15,533 Distribution to Justice

A Local Partnership Was in the Process of Liquidating and Reported