A partner withdraws from a partnership by selling her interest to another person who currently is not associated with the firm. As a results of this transaction, the capital account balance of the other partners in the partnership d. will decrease X, Y, and Z are partners, sharing income 1:2:3. After selling all of the assets for cash, dividing losses on realization, and paying liabilities, the balances in the capital accounts are as follows: X, $58,708 Cr.; Y, $30,756 Dr.; and Z, $43,814 Cr. How much cash is available for distribution to the partners? Select the correct answer. Solution (1) If one partner withdraws, it is the Dissolution of Partnership, not dissolution of the Firm, and that does not change the capital account balance of other partners. Their capital remains the same as before. Correct option (a) (2) In thie partnership structure, the solvent partners (having credit capital balance) will share the loss arising from the insolvent partners (having debit capital balance). Therefore, total cash available will be $(58,708 + 43,814 - 30,756) = $71,766 .

1. A partner withdraws from a partnership by selling her interest to another person who currently is
not associated with the firm. As a results of this transaction, the capital account balance of the
other partners in the partnership
d. will decrease
X, Y, and Z are partners, sharing income 1:2:3. After selling all of the assets for cash, dividing
losses on realization, and paying liabilities, the balances in the capital accounts are as follows: X,
$58,708 Cr.; Y, $30,756 Dr.; and Z, $43,814 Cr. How much cash is available for distribution to
the partners?
Select the correct answer.
a. will remain the same.
b. may increase, decrease, or remain the same.
c. will increase.
d. will decrease
X, Y, and Z are partners, sharing income 1:2:3. After selling all of the assets for cash, dividing
losses on realization, and paying liabilities, the balances in the capital accounts are as follows:
X, $58,708 Cr.; Y, $30,756 Dr.; and Z, $43,814 Cr. How much cash is available for
distribution to the partners?
Select the correct answer.
$30,756
$133,278
$71,766
$102,522
Solution

2. (1) If one partner withdraws, it is the Dissolution of Partnership, not dissolution of the Firm, and
that does not change the capital account balance of other partners. Their capital remains the same
as before.
Correct option (a)
(2) In thie partnership structure, the solvent partners (having credit capital balance) will share the
loss arising from the insolvent partners (having debit capital balance). Therefore, total cash
available will be
$(58,708 + 43,814 - 30,756) = $71,766