Partners David and Goliath Have Decided to Liquidate Their Business

question 61

Short Answer

Partners David and Goliath have decided to liquidate their business. The following information is available:
David and Goliath share profits and losses in a 3:1 ratio, respectively. During the first month of liquidation, half the inventory is sold for $70,000, and $50,000 of the accounts payable are paid. During the second month, the rest of the inventory is sold for $55,000, and the remaining accounts payable are paid. Cash is distributed at the end of each month, and the liquidation is completed at the end of the second month.
-Refer to the information provided above.Assume instead that the remaining inventory was sold for $20,000 in the second month.What payments will be made to David and Goliath at the end of the second month?

---

Definitions:

Stroma

The supportive tissue framework of an organ, gland, or other structure, often consisting of connective tissues and blood vessels.

Thylakoid Compartment

A membrane-bound structure within chloroplasts of plant cells and cyanobacteria, involved in the light-dependent reactions of photosynthesis.

Organic Material

Matter composed of organic compounds that has come from the remains of organisms such as plants and animals and their waste products in the environment.

Environment

The surrounding conditions, influences, or forces which affect the survival, development, and evolution of organisms or communities.