Reference no: EM133014362

Question -

Q1. Jane, Honey, and Nica are partners with present capital balances of $40,000, $50,000 and $20,000 respectively. The partners share profits and losses according to the following percentages: 50% for Jane, 20% for Honey, and 30% for Nica. Delia is to join the partnership upon contributing $55,000 to the partnership in exchange for a 35% interest in capital and a 20% interest in profits and losses. An appraisal of the existing partnerships' assets reveals the following: Accounts Receivable - 20,000 overvalued; Inventory - 10,000 overvalued; Land - 10,000 undervalued; Building - 15,000 undervalued.

a. How much is the capital balance of Honey in the new partnership assuming bonus method?

b. How much is the bonus of Nica in the new partnership assuming bonus method?

Q2. What shall be paid last in the liquidation of the partnership?

Those owing to limited partners

Those owing to general partners for their share in profit

Those owing to general partners for their capital contribution

Those owing to creditors