At June 30, Fine Balance Partnership Is Liquidated

question 85

Essay

At June 30, Fine Balance Partnership is liquidated. Just before the liquidation, Fine Balance has cash of $2,800, equipment of $45,000, accumulated depreciation of $31,000, accounts payable of $6,000, and the following partner capital accounts: R. Mistry $9,000; M. Mohal $1,800. Partners share in profit or losses equally. Upon liquidation, the equipment is sold for $10,000 cash, the accounts payable are paid in full, and any remaining cash is distributed to the partners. If a partner's capital account is in a deficit balance, he or she will contribute the necessary cash to the partnership to cover it.
Instructions
Calculate how much cash will be paid to, or received from, each partner upon liquidation.

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Definitions:

Marginal Cost

The increment in overall price involved in producing one extra unit of a product or service.

Instructional Modules

Structured units designed to provide learners with information and activities in a specific subject area, often used in educational contexts.

Fixed Cost

A business expense that remains constant regardless of how much goods or services are produced.

Average Variable Cost

The total variable costs of production divided by the number of units produced, representing the variable cost per unit.