Question

The partnership of Hendrick, Mitchum, and Redding has the following account balances: Cash $ 53,000 Liabilities $ 38,000 Noncash assets 138,000 Hendrick, capital 98,000 Mitchum, capital 73,000 Redding, capital (18,000 ) This partnership is being liquidated. Hendrick and Mitchum are each entitled to 40 percent of all profits and losses with the remaining 20 percent going to Redding. What is the maximum amount that Redding might have to contribute to this partnership because of the deficit capital balance

Answer 1

Answer:

$45,600

Explanation:

Particulars                                                                         Amount

Redding capital                                                                $18,000

Potential loss of non-cash Assets (138,000*20%)         $27,600

Maximum amount contributed by Redding, Capital  $45,600

So, the maximum amount that Redding might have to contribute to this partnership because of the deficit capital balance is $45,600.