Question
The capital balances, prior to the liquidation of the XYZ partnership, were as follows: X Capital, $130,000, Y Capital, $130,000 and Z Capital, $100,000. X,
The capital balances, prior to the liquidation of the XYZ partnership, were as follows: X Capital, $130,000, Y Capital, $130,000 and Z Capital, $100,000. X, Y, and Z share profits and losses in the ratio of 5:3:2. As a result of a loan, the partnership owes Y $80,000. Which partner has the highest Loss Absorption Power (LAP) prior to liquidation?
| A. X | ||
| B. Y | ||
| C. Z | ||
| D. Both X and Y |
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Financial Accounting
Authors: Craig Deegan
9th Edition
1743767382, 9781743767382
