Spalding, Dane, and Manson Are Partners, Sharing Profits and Losses

question 73

Essay

Spalding, Dane, and Manson are partners, sharing profits and losses in the ratio of 30, 40, and 30 percent respectively. Their partnership agreement provides that if one of them withdraws from the partnership, the assets and liabilities are to be revalued, the gain or loss allocated to the partners, and the retiring partner paid the balance of his account. Manson withdraws from the partnership on December 31, 2013. The capital account balances before recording revaluation are Spalding, $230,000; Dane, $250,000; and Manson, $220,000. The effect of the revaluation is to increase Merchandise Inventory by $21,000 and the Building account balance by $41,000. How much cash will be paid to Manson?

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Definitions:

Financial Account

A component of a country's balance of payments that records transactions of foreign investment and domestic investments abroad.

Capital Account

A national account that shows the net change in asset ownership for a country, including transactions like foreign investments and loans.

Financial Account

A component of a country's balance of payments that records all transactions for investment in foreign assets and liabilities.

Current Account

Part of a country's balance of payments, including the trade balance, net income from abroad, and net current transfers, reflecting the difference between a nation's savings and its investment.