Distribution of cash upon liquidation

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Distribution of cash upon liquidation

Deacon, Raines, and Francis arranged to import and sell orchid corsages for a university dance. They agreed to share equally the net income or net loss of the venture. Deacon and Raines advanced $300 and $450 of their own respective funds to pay for advertising and other expenses. After collecting for all sales and paying creditors, the partnership has $1,800 in cash.

a. How should the money be distributed?

b. Assuming that the partnership has only $600 instead of $1,800, do any of the three partners have a capital deficiency? If so, how much?

Reference no: EM13534180

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