Distribution of Cash Upon Liquidation

Bray, Lincoln, and Mapes arranged to import and sell orchid corsages for a university dance. They agreed to share equally the net income or net loss of the venture. Bray and Lincoln advanced $390 and $600 of their own respective funds to pay for advertising and other expenses. After collecting for all sales and paying creditors, the partnership has $1,590 in cash.

Use the minus sign to indicate any deficiency for the capital accounts.

For those boxes in which you must enter subtractive or negative numbers use a minus sign.

a. How much net income was earned from the venture? $

b. How should the money be distributed?

	Bray	Lincoln	Mapes	Total
Capital balances and cash distribution	$	$	$	$

c. Assume that the partnership has only $840 instead of $1,590. Do any of the three partners have a capital deficiency?

If so, how much? $

	Bray	Lincoln	Mapes	Total
Capital balances	$	$	$	$