Answered

Nettles, King, and Tanaka are partners sharing income 3:2:1. After the firm's loss from liquidation is distributed, the capital account balances were: Nettles, $60,000 Dr.; King, $224,000 Cr.; and Tanaka, $158,000 Cr.
If Nettles is personally bankrupt and unable to pay any of the $60,000, what will be the amount of cash received by King and Tanaka upon liquidation? If an amount is zero, enter in 0. Use the minus sign to indicate any deficiencies.

Answer :

Answer:

For King = $183,800

For Tanaka =  $138,200

Explanation:

The computation of cash received is shown below:-

                              King                        Tanaka

Capital balance          $224,000                $158,000

Share of loss to be

distributed in  

Profit sharing ratio       $40,200                    $19,800

of 2:1                          ($60,000 × 2 ÷ 3)   ($60,000 × 1 ÷ 3)

Cash to be distributed    $183,800                $138,200

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