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QUESTION
Part A (3) Disregarding the marital complications, do you suppose that the partners would have been able to receive their proportional share of the equity determined in Question 2 if the partnership was dissolved on March 30, 2006? Why?
Working 1) and actual cash available in cash register ($311) should be deducted as it is presumed to be taken by them. Their total share of equity comes to $37,416 (Refer Working 2) which needs to be divided amongst the three. Therefore the $12,382 would be the share of either and combined payable to Mr. Henry Antoine and Mrs. Sandra Landers would be $23,116 (Refer Working 3). The above value is arrived at presuming that Mrs. Henry Antoine takes over the business along with existing assets and liabilities. Thus $870 which is shown as Account Receivable while preparing balance sheet is considered as good since it is recovered later. In case the $870 is received while preparing the Balance sheet then the loss figure will be inflated by $870 resulting into the loss of $11,724 (Refer working 4) and accordingly share of each partner would be $12,092 and thus combined payable to Mr. Henry Antoine and Mrs. Sandra Landers will then be $22,536.
Combined payable to Mr. Henry Antoine and Mrs. Sandra Landers in case $870 is shown as Account Receivable in Balance Sheet as on March 30, 2006
Particulars Share of Mr. Henry Antoine Share of Mrs. Sandra Landers Total of Both Less : Value of Cash Register Less : Cash in Cash register Total Payable Amount ($) 12,382 12,382 24,764 1,337 311 23,116
Combined payable to Mr. Henry Antoine and Mrs. Sandra Landers in case $870 is considered as already received while preparing Balance sheet as on March 30, 2006.
Particulars Initial Capital Investment Less : Loss for the period Total Equity Share of Mr. Henry Antoine (1/3rd) Share of Mrs. Sandra Landers (1/3rd) Total of Both Less : Value of Cash Register Less : Cash in Cash register Total Payable Amount ($) 48,000 11,724 36,276 12,092 12,092 24,184 1,337 311 22,536