Martin, Pearson, and Henderson are partners sharing profits and losses in a 2:1:1 ratio. Their capital...

 

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Martin, Pearson, and Henderson are partners sharing profits and losses in a 2:1:1 ratio. Their capital balances are $30,000, $25,000, and $20,000, respectively. Because of an eco- nomic turndown, they have decided to liquidate. After all assets are sold and the credi- tors paid, $43,000 cash remains in the business chequing account. a. Determine the amount of their losses by using the accounting equation. b. Using the profit-loss ratio, determine the amount of loss to be distributed to each partner, and determine their new capital balances. C. Determine the amount of cash each partner will receive in the final distribution. Martin, Pearson, and Henderson are partners sharing profits and losses in a 2:1:1 ratio. Their capital balances are $30,000, $25,000, and $20,000, respectively. Because of an eco- nomic turndown, they have decided to liquidate. After all assets are sold and the credi- tors paid, $43,000 cash remains in the business chequing account. a. Determine the amount of their losses by using the accounting equation. b. Using the profit-loss ratio, determine the amount of loss to be distributed to each partner, and determine their new capital balances. C. Determine the amount of cash each partner will receive in the final distribution.

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