Accounting Investments Problems

Accounting Investment Problem?

Alex, Becky and Cindy contributed money ($30,000, $15,000 and $5,000 respectively) to ABC partnership. Upon dissolution, after paying all creditors, $20,000 remains. The partnership has suffered a $30,000 loss because $50,000 was contributed to capital and only $20,000 remains. profit and loss are to be allocated as follows: 40% to Alex; 25% to Becky, and 35% to Cindy.Calculate the profit or loss for each partner.

Alex share = 0.4 X 20000 = 8000 $

Alex loss = [(30000 - 8000) / 30000] X 100 = 73.33%

Becky share = 0.25 X 20000 = 5000$

Becky Loss = [(15000 - 5000) / 15000] X 100 = 66.67%

Cindy share = 0.35 X 20000 = 7000 $

Cindy profit = [(7000 - 5000)] / 5000] X 100 = 40%

Good luck

Accounting and Investments - Introduction

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