Pro rata liquidating distribution

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This would mean a pro-rata reduction in ownership interest of one-third for each of the original owners, who would go from each owning 50 percent to each owning 33.33 percent.If a small construction business uses property with a book value of 0,000 and equipment with a book value of ,000 to generate sales, the total book value is 0,000 plus ,000, or 0,000.This means that the pro-rata reduction for the property is ,600 -- 83 percent multiplied by ,000.The pro-rata reduction for the equipment is ,400, which is 17 percent multiplied by ,000.Therefore, the property book value after the impairment reduction is ,400, computed as 0,000 minus ,600.The book value for the equipment is ,600, which is ,000 minus ,400.The term "pro-rata" has several applications in small and large businesses, such as cost allocation and distribution of liquidation proceeds.Pro-rata reduction usually refers to dilution of ownership interests and the impairment of fixed assets.

If the total recoverable amount for these assets is 0,000 at year-end, the impairment loss is 0,000 minus 0,000, or ,000.Basu holds a Bachelor of Engineering from Memorial University of Newfoundland, a Master of Business Administration from the University of Ottawa and holds the Canadian Investment Manager designation from the Canadian Securities Institute.On July 28, 2014, we filed a Certificate of Dissolution with the Secretary of State of the State of Delaware and became a dissolved corporation.Any impairment loss should be applied first to reduce the value of goodwill, followed by pro-rata reductions in the book value of other fixed assets that the company uses to generate sales.If two partners who own equal shares in a restaurant bring in a new investor, each partner would own a third of the restaurant, assuming they agree to an equal split.

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