The Partnership of Rick and Allan Is Being Liquidated If the Other Assets Are Sold for $9,000,how Much Will

question 36

Short Answer

The partnership of Rick and Allan is being liquidated.All gains and losses are shared in a 3:5 ratio,respectively.Before liquidation,their balance sheet balances are as follows:
$$\begin{array} { l r } \text { Cash } & \$ 10,000 \\\text { Other Assets } & 8,000 \\\text { Liabilities } & 4,000 \\\text { Rick, Capital } & 7,000 \\\text { Allan, Capital } & 7,000\end{array}$$
If the Other Assets are sold for $9,000,how much will each partner receive upon liquidation?

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Definitions:

Comprehensive Income

The total change in equity for a business enterprise during a period from transactions and other events from non-owner sources, including all revenues, gains, expenses, and losses.

Net Income

The profit of a company after all expenses and taxes have been subtracted from total revenue.

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value due to wear and tear, aging, or obsolescence.

EAC Method

Equivalent Annual Cost Method, a decision-making tool used for evaluating the cost-effectiveness of projects with differing lifespans.