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ACE COMPANY
Balance Sheet
April 15, 2003
5. Elliott is unable to pay the $1,800 to the partnership so the other partners
must absorb the loss. The loss is allocated on the basis of their income
ratios.
6. The cash balance of $16,000 (5,000 + 42,000 – 31,000) is now equal to the
other two partners capital accounts. It can now be distributed to them on
April 25.