Prior to liquidating their partnership Perkins and Montgomer

Prior to liquidating their partnership, Perkins and Montgomery had capital accounts of $73,000 and $125,000, respectively. Prior to liquidation, the partnership had no cash assets other than what was realized from the sale of assets. These partnership assets were sold for $190,000. The partnership had $8,000 of liabilities. Perkins and Montgomery share income and losses equally. Determine the amount received by Perkins as a final distribution from liquidation of the partnership.

Solution

Particulars Total Assets Total Laibilites Perkins Capital Montgomery Capital 50% 50% Balances After Liquidation 190000 8000 73000 125000 Less: First liabilities will pay -8000 -8000 $                         -   $                       -   Total Available Funds 182000 0 73000 125000 Distribution of avaialble Funds in (50% ; 50% ) -182000 $               91,000 $              91,000 So the perkins will receive the final payment is $ 91,000