Question
Allen, Branden & Caylin are in the process of liquidating their partnership. They have the following capital balances and profit and loss percentages: Capital Balance
Allen, Branden & Caylin are in the process of liquidating their partnership. They have the following capital balances and profit and loss percentages:
|
| Capital Balance | Profit/Loss % | |
| Allen | 5,000 | debit | 20% |
| Branden | 18,000 | credit | 50% |
| Caylin | 6,000 | credit | 30% |
The partnership balance sheet shows cash of $5,000, non-cash assets of $14,000, and no liabilities. Assuming no liquidation expenses, what safe payment could be made?
| a. | $5,000 split between Branden & Caylin by a ratio of 5/8 and 3/8, respectively. |
| b. | $5,000 to Branden only |
| c. | $1,000 to Allen, $2,500 to Branden, and $1,500 to Caylin |
| d. | $18,000 to Branden only Show computations. |
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