Set up the capital accounts of the partners for each of these years, showing balance of each at the end of the third year.
Partnership—Dissolution
12. A, B, and C are in partnership. A invested $11,000; B invested $5,000 and C invested $1,200. Their agreement provides that profits or losses shall be divided as follows: A, ⁴/₉; B, ³/₉; and C, ²/₉.
The partnership has become insolvent and has therefore decided to dissolve. The cash value of assets is $10,000. The deficit is, therefore, $7,200. How should the assets be divided and how much money will each partner receive?
13. A, B, and C engage in business. A contributes $10,000 capital; B contributes $5,000; while C in lieu of any capital contribution agrees to undertake the active management at a salary of $3,000 a year, to be paid monthly.
After allowing 5% interest on capital, they are to divide the net result in the proportions of 5, 3, and 2 respectively.
At the end of eighteen months they ascertain the position to be unfavorable and decide to wind up. The assets realize $12,500; there are no liabilities except for capital and interest thereon and one month’s salary, due to C.
Make up the partners’ accounts showing the amount to be received by each.
14. Thompson and Murray are partners, sharing profits and losses equally. The partnership is dissolved December 31, 19—, at which time Thompson’s capital investment is $20,000, and Murray’s $7,000. Total liabilities are $55,000, included in which is $5,000 due Wilson on open account, and $7,000 due Murray on account. The whole of the assets had been disposed of for $60,000 cash by July 1 of the next year. Close the partnership books.
Corporation Books