Ask Question
16 January, 00:16

A, B, and C have capital balances of $80,000, $80,000, and $40,000, respectively. Profits are allocated 40% to A, 40% to B and 20% to C. The partners have decided to dissolve and liquidate the partnership. After paying all creditors the amount available for distribution is $20,000. A, and B are personally solvent. C is personally insolvent. Under the circumstances, A and B will each:

+3
Answers (1)
  1. 16 January, 03:24
    0
    receive $8,000 each

    Explanation:

    In the question, A and B are solvent partners whereas C is an insolvent partner but the amount would be distributed to all partners in their profit-loss sharing ratio i. e 4:4:2 as C is not in the condition to contribute the amount but has the right to take his profit

    So, A and B would be received

    = $20,000 * 4 : 10

    = $8,000 each

    And, the remaining amount would be given to C partner i. e

    = $20,000 - $8,000 - $8,000

    = $4,000
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “A, B, and C have capital balances of $80,000, $80,000, and $40,000, respectively. Profits are allocated 40% to A, 40% to B and 20% to C. ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers