Tom, Dick, and Harry are partners in an equipment leasing business that has not

Question

Tom, Dick, and Harry are partners in an equipment leasing business that has not been able to generate the type of revenue expected by the partners. They share profits and losses in a ratio of 5:3:2. They have decided to liquidate the business and have sold all the assets except for one piece of heavy machinery. All partnership liabilities have been settled and all the partners are personally insolvent. The machinery has a book value of $85,000, and the partners have capital account balances as follows Tom, Capital Dick, Capital Harry, Capital Each of the following are independent cases $40,000 10,000 15,000 value Requlred Informatlon 2.00 polnts Refer to the information given above. What amount of cash will each partner receive as a liquidating distribution if the machinery is sold for 65,000 dollars? A) B) C) D) Tom $40,000 $30,000 $50,000 $40,000 Dick $10,000 $4,000 $16,000 $4,000 Harry $15,000 $11000 $19,000 $14,000 Option C Option B 0 Option D O Option A

Explanation / Answer

Solution:-

14. Option B

15. Option C

16. Option A

Please Rate or comment if you have any doubt regarding this solution.

Tom Dik Harry $30,000 $4,000 $11,000

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