Amount of cash from distribution of partnership assets


PROBLEM I:

The Keaton, Lewis, and Meador partnership had the following balance sheet just before entering liquidation:                   

CASH 10000
LIABILITIES 130000
NON CASH ASSETS 300000
KEATON CAPITAL 60000



LEWIS CAPITAL 40000
 

MEADOR CAPITAL 80000
   TOTALS 310000
   TOTALS 310000

Keaton, Lewis, and Meador share profits and losses in a ratio of 2:4:4.  Noncash assets were sold for $180,000. Liquidation expenses were $12,000.                    
                   
PART A:

Assume that Lewis was personally insolvent and could not contribute any assets to the partnership, while Keaton and Meador were both solvent.  What amount of cash would Keaton and Meador have received from the distribution of partnership assets?                    
                   
PART B:

Assume that Keaton was personally insolvent with assets of $8,000 and liabilities of $60,000. Lewis and Keaton were both solvent and able to cover deficits in their capital accounts, if any. What amount of cash could Keaton's personal creditors have expected to receive from partnership assets?                    
                   
PROBLEM II:                   

The Henry, Isaac, and Jacobs partnership was about to enter liquidation with the following account balances:       

CASH 90000
LIABILITIES 60000
NON CASH ASSETS 300000


80000





110000





140000
   TOTALS 390000
   TOTALS 390000

Estimated expenses of liquidation were $10,000.  Henry, Isaac, and Jacobs shared profits and losses in a ratio of 2:4:4.                    
                   
What amount of safe cash was available, based on the above information?

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Accounting Basics: Amount of cash from distribution of partnership assets
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