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28 June, 10:53

Nettles, King, and Tanaka are partners sharing income 3:2:1. After the firm's loss from liquidation is distributed, the capital account balances were: Nettles, $60,000 Dr.; King, $224,000 Cr.; and Tanaka, $158,000 Cr.

If Nettles is personally bankrupt and unable to pay any of the $60,000, what will be the amount of cash received by King and Tanaka upon liquidation? If an amount is zero, enter in 0. Use the minus sign to indicate any deficiencies.

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  1. 28 June, 13:06
    0
    For King = $183,800

    For Tanaka = $138,200

    Explanation:

    The computation of cash received is shown below:-

    King Tanaka

    Capital balance $224,000 $158,000

    Share of loss to be

    distributed in

    Profit sharing ratio $40,200 $19,800

    of 2:1 ($60,000 * 2 : 3) ($60,000 * 1 : 3)

    Cash to be distributed $183,800 $138,200
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