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30 September, 16:47

The Abrams, Bartle, and Creighton partnership began the process of liquidation with the following balance sheet:

Cash 16,000

Noncash asset 434,000

Total - 450,000

Liability-150000

Abrams-80,000

Bartle - 90,000

Creighton-130,000

total - 450,000

Abrams, Bartle, and Creighton share profits and losses in a ratio of 3:2:5. Liquidation expenses are expected to be $12,000.

The noncash assets were sold for $134,000. Which partner (s) would have had to contribute assets to the partnership to cover a deficit in his or her capital account, prior to considering the liquidation expenses incurred?

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  1. 30 September, 20:01
    0
    Answer and Explanation:

    The contribution of assets to the partnership to cover a deficit is presented below:

    Particulars Abram Bartle Creighton

    Capital Balance $80,000 $90,000 $130,000

    Less:

    Allocation of non cash assets sold ($434,000 - $134,000) = $300,000 in 3 : 2 : 5 ratio

    -$90,000 - $60,000 - $150,000

    Liquidation expense - $3,600 - $2,400 - $6,000

    Liabilities ($150,000 - $16,000) = $134,000 in 3 : 2 : 5 ratio

    -$40,200 -.$26,800 - $67,000

    Adjusted capital balance - $53,800 $800 - $93,000

    So based on the above calculation the Abram and Creighton have to contribute the assets
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