Before liquidation, the following is the financial position of the partnership W, X, Y and Z:W, capital275,000W, loan50,000X, capital225,000Y, capital257,500Z, capital342,500P&L ratio is 4:3:2:1, respectively. 300,000 was received from certain assets are sold and are distributed to partners. What cash amount should Z receive?a. 300,000b. 0c. 135,834d. 166,166

During the liquidation of a partnership firm, the amount realized from the assets is first paid for…

Answered: Before liquidation, the following is…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Before liquidation, the following is the financial position of the partnership W, X, Y and Z:

W, capital	275,000
W, loan	50,000
X, capital	225,000
Y, capital	257,500
Z, capital	342,500

P&L ratio is 4:3:2:1, respectively. 300,000 was received from certain assets are sold and are distributed to partners. What cash amount should Z receive?

a. 300,000

b. 0

c. 135,834

d. 166,166

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

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