Chapter 05, Partnership, termination and liquidation

Balance each partner is liable each partner is liable

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Unformatted text preview: ositive capital specific partner’s positive capital balance. balance. Each partner is liable Each partner is liable fforALL tthedebts of or ALL he debts of tthepartnership. he partnership. Partners are NEVER Partners are NEVER lliablefor the personal iable for the personal debts of the other debts of the other partners. partners. Page 30 Pre-distribution Plan Used by accountants to guide the distribution of cash Used by accountants to guide the distribution of cash Used resulting from the liquidation process. rresulting from the liquidation process. esulting resulting Examine the Balance Sheet below. Assume the income Examine the Balance Sheet below. Assume the income sharing % is Finn 10%, Scales 40%, and Gill 50%. sharing % is Finn 10%, Scales 40%, and Gill 50%. Page 31 Pre-distribution Plan First, determine the maximum loss that each First, determine the maximum loss that each First, First, partner can absorb. Divide each partner’s partner can absorb. Divide each partner’s capital balance by their respec...
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This document was uploaded on 03/25/2014.

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