Question: Tye, Ula, Val, and Watt are partners who share profits and losses 40%, 30%, 20%, and 10%, respectively. The partnership will be liquidated gradually over several months beginning January 1, 2014. The partnership trial balance at December 31, 2013 is as follows:
Debits Credits
Cash $3,000
Accounts receivable 19,000
Inventory 25,000
Loan to Val 5,000
Furniture 15,000
Equipment 10,000
Goodwill 12,000
Accounts payable $ 13,600
Note payable 30,000
Loan from Tye 5,000
Tye, capital (40%) 15,000
Ula, capital (30%) 9,000
Val, capital (20%) 12,400
Watt, capital (10%) 4,000
Totals $ 89,000 $ 89,000
Required: Prepare a cash distribution plan for January 1, 2014, showing how cash installments will be distributed among the partners as it becomes available. Prepare vulnerability rankings for the partners and a schedule of assumed loss absorption