John from sales has just sent you an e-mail. He needs a decision made on the Johnson account as soon as possible. You can make t
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Answer: <em><u>Cash to be distributed to Harding = $ 17000, Jones = $ 3000 </u></em>
Explanation:
It has been indicated that the ($9,000) deficit will be covered with a forthcoming contribution
∴ The Remaining Capital Balance is = (24000 + 24000) = $48000
∵Total cash Available = $20000
Loss = 48000 - 20000 = $ 28000
Loss will be shared between Harding & Jones in ratio = 16:48
∴ Harding Capital balance = = $ 17000
∴ Jones Capital balance = = $ 3000
Cash will be Distributed in their capital balance ratio
Therefore,
<u><em>Cash to be distributed to Harding = $ 17000, Jones = $ 3000 </em></u>