Turner, Roth, and Lowe are partners who share income and loss in a 2:3:5 ratio. After lengthy disagreements among the partners and several unprofitable periods, the partners decide to liquidate the partnership. Immediately before liquidation, the partnership balance sheet shows total assets, $150,000; total liabilities, $98,000; Turner, Capital, $4,500; Roth, Capital, $15,000; and Lowe, Capital, $32,500. The cash proceeds from selling the assets were sufficient to repay all but $38,000 to the creditors. Required:
a. Calculate the loss from selling the assets.
b. Allocate the loss from part a to the partners.
c. Determine how much, if any, each partner should contribute to the partnership to cover any remaining capital deficiency.

Turner, Roth, and Lowe Partnership

a. The Loss from selling the assets = $90,000

b. Allocation of the loss to the partners:

Turner = $18,000 (2/10 * $90,000)

Roth = $27,000 (3/10 * $90,000)

Lowe = $45,000 (5/10 * $90,000)

c. Capital contribution by partners to cover capital deficiency:

                                     Turner     Roth        Lowe       Total

Capital contribution   $13,500  $12,000   $12,500  $38,000

Explanation:

a) Data and Calculations:

Total assets,          $150,000

Total liabilities,        $98,000

Turner, Capital,         $4,500

Roth, Capital,           $15,000

Lowe, Capital,         $32,500

Liabilities + Equity $150,000

Cash proceeds from sale of assets = $60,000 ($98,000 - $38,000)

Loss from selling the assets = $90,000 ($150,000 - $60,000)

Loss sharing ratio = 2:3:5

Loss sharing:

Turner = $18,000 (2/10 * $90,000)

Roth = $27,000 (3/10 * $90,000)

Lowe = $45,000 (5/10 * $90,000)

Capital Deficiency =

                                     Turner     Roth        Lowe

Capital accounts         $4,500   $15,000   $32,500

Loss sharing               (18,000)   (27,000)   (45,000)

Capital Deficiency   ($13,500)  ($12,000) ($12,500)

Capital contribution $13,500    $12,000   $12,500

b) After contributing to the capital deficiencies to the tune of $38,000, the remaining liabilities will be settled.

whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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