A local partnership has only two assets (cash of $10,000 and land with a cost of $35,000).

Question:

A local partnership has only two assets (cash of $10,000 and land with a cost of $35,000). All liabilities have been paid and the following capital balances are currently being recorded. The partners share profits and losses as follows. All partners are insolvent.

Brown, capital (40%) . . . . . . . . . . $25,000

Fish, capital (30%) . . . . . . . . . . . . 15,000

Stone, capital (30%) . . . . . . . . . . 5,000

a. If the land is sold for $25,000, how much cash does each partner receive in a final settlement?

b. If the land is sold for $15,000, how much cash does each partner receive in a final settlement?

c. If the land is sold for $5,000, how much cash does each partner receive in a final settlement?

Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...