The partnership of Anderson, Berry, Hammond, and Winwood is being liquidated. It currently holds cash of $20,000
Question:
The partnership of Anderson, Berry, Hammond, and Winwood is being liquidated. It currently holds cash of $20,000 but no other assets. Liabilities amount to $30,000. The capital balances are
Anderson (40% of profits and losses) . . . . . . . . . . . . . . . . . $ 20,000
Berry (30%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000
Hammond (20%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (17,000) (deficit)
Winwood (10%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (25,000) (deficit)
(a). If both Hammond and Winwood are personally insolvent, how much money must Berry contribute to this partnership?
(b). If only Winwood is personally insolvent, how much money must Hammond contribute to the partnership? How will these funds be disbursed?
(c). If only Hammond is personally insolvent, how much money should Anderson receive from the liquidation?
PartnershipA legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...
Step by Step Answer:
Advanced Accounting
ISBN: 9781260247824
14th Edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik