White, Sands, and Luke has the following capital balances and profit and loss ratios:
$60,000 (30%); $100,000 (20%); and $200,000 (50%).
The partnership has received a predistribution plan.
How would $200,000 be distributed?

Question

Quizplus · Accepted Answer

White: ($200,000 - $20,000 - $140,000) × 30% = $12,000Sands: $20,000 + $40,000 ($140,000 × 2/7) + $8,000 (($200,000 - $20,000 - $140,000) × 20%) = $68,000Luke: $100,000 ($140,000 × 5/7) + $20,000 (($200,000 - $20,000 - $140,000) × 50%) = $120,000

White, Sands, and Luke Has the Following Capital Balances and Profit