Minden, Mel, and Montana decide to liquidate their partnership. All assets are sold, and the liabilities are paid. Following these transactions, the capital balances and profit and loss percentages are as follows: Minden, $27,000 and 30%; Mel, $ (12,000) and 40%; Montana, $43,000 and 30%. Mel is unable to contribute any assets to reduce the deficiency. How much cash will Montana receive as a result of the partnership liquidation

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Business

Dakota Schmidt

30 July, 19:09

Minden, Mel, and Montana decide to liquidate their partnership. All assets are sold, and the liabilities are paid. Following these transactions, the capital balances and profit and loss percentages are as follows: Minden, $27,000 and 30%; Mel, $ (12,000) and 40%; Montana, $43,000 and 30%. Mel is unable to contribute any assets to reduce the deficiency. How much cash will Montana receive as a result of the partnership liquidation

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Armani Pham · Answer 1

The amount of cash that will be received by Montana is $37000.

Explanation:

Minden Mel Montana

Profit sharing ratio 30% 40% 30%

Balances 27000 - 12000 43000

Deficiency distrubuted - 6000 12000 - 6000

Cash received by partners 21000 0 37000

Minden and Montana have to contribute in their

profit sharing ratio (30% and 30%), i. e., equally.

Therefore, the amount of cash that will be received by Montana is $37000.