Roger Fuller and Mike Rangel are discussing the liquidation of a partnership. Roger maintains that all cash should be distributed to partners on the basis of their income ratios. Is he correct? Explain.
Answer to relevant QuestionsIn continuing their discussion from Question 13, Mike says that even in the case of a capital deficiency, all cash should still be distributed on the basis of cap ital balances. Is Mike correct? Explain.In Question 13, Roger ...Jerry Park decides to invest $25,000 in a partnership for a one-sixth capital interest. How much do the partnership's net assets increase? Does Park also acquire a one-sixth income ratio through this investment?Rod Dall Co. reports net income of $75,000. The income ratios are Rod 60% and Dall 40%. Indicate the division of net income to each partner, and prepare the entry to distribute the net income.Frontenac Company reported net income of $75,000. The partnership agreement provides for salaries of $25,000 to Miley and $18,000 to Guthrie. They divide the remainder 40% to Miley and 60% to Guthrie. Miley asks your help to ...Terry, Nick, and Frank are forming The Doctor Partnership. Terry is transferring $30,000 of personal cash and equipment worth $25,000 to the partnership. Nick owns land worth $28,000 and a small building worth $75,000, which ...
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