A local partnership has assets of cash of $130,000 and land recorded at $700,000. All liabilities have been paid and the partners are all personally insolvent. The partners' capital accounts are as follows Roberts, $500,000, Ferry, $300,000 and Mones, $30,000. The partners share profits and losses 5:3:2.
If the land is sold for $450,000, how much cash will Mones receive in the final settlement?

Question

Quizplus · Accepted Answer

R = $500,000; F = $300,000; M = $30,000 with Losses Shared 5:3:2M Share of $250,000 Loss × 20% = $50,000; Capital Balance of $30,000 is Lost; Balance = 0

A Local Partnership Has Assets of Cash of $130,000 and Land