Big, Mighty, and Ducks shared profits and losses for their BMD Partnership in a ratio of 2:3:5.
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Question:
Big, Mighty, and Ducks shared profits and losses for their BMD Partnership in a ratio of 2:3:5. When they decided to liquidate, the balance sheet was as follows: Assets Plant assets (net) $350,000 Total Assets $350,000 $ 140,000 Liabilities and Capital Accounts payable Big, Capital Mighty, Capital Ducks, Capital 70,000 60,000 80,000 Total liabilities and Equity $350,000 Big, Mighty, and Ducks agreed to distribute available cash back to partners during the liquidation process. If EACH partner properly received some cash during the liquidation and the cash to be distributed amounts to $10,000 from the final sale of noncash assets, $10,000 should be distributed: (Hint: We discussed this one in class.) A. $2,000 to Big, $3,000 to Mighty, and $5,000 to Ducks. B. in the ratio of 70,000/210,000, 60,000/210,000, and 80,000/210,000, to Big, Mighty, and Ducks, respectively. C. $0 to Big. $0 to Mighty, and $10,000 to Ducks. D. $10,000 to Big, 50 to Mighty, and $0 to Ducks
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