{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Chapter 05, Partnership, termination and liquidation

Sharing sharing sharing page32 pre distribution plan

This preview shows page 1. Sign up to view the full content.

This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: tive income capital balance by their respective income sharing %. sharing %. sharing sharing Page 32 Pre-distribution Plan Since Gill can ONLY absorb a partnership loss Since Gill can ONLY absorb a partnership loss Since Since off \$10,000, we will first compute new balances o \$10,000, we will first compute new balances assuming that the partnership has a \$10,000 assuming that the partnership has a \$10,000 loss. lloss. oss. loss. Page 33 Pre-distribution Plan With Gill wiped out, we will proceed with With Gill wiped out, we will proceed with determining maximum absorbable losses determining maximum absorbable losses using income sharing percentages of using income sharing percentages of Finn 20% (1/5) and Scales 80% (4/5). Finn 20% (1/5) and Scales 80% (4/5). Page 34 Pre-distribution Plan As earlier, we will compute the maximum As earlier, we will compute the maximum As As absorbable loss by dividing the capital balances by absorbable loss by dividing the capital balances by the relative income sharing %. tthe relative income sharing %. he the Page 35 Pre-distribution Plan As we can see above, Scales can only As we ca...
View Full Document

{[ snackBarMessage ]}