The following information concerns two different partnerships. These problems should be viewed as independent situations. (Do not round intermediate calculations.)
Part AThe partnership of Ross, Milburn, and Thomas has the following account balances:
Cash $ 44,000 Liabilities $ 35,000
Noncash assets 113,000 Ross, capital 50,000
Milburn, capital (13,000 ) (deficit)
Thomas, capital 85,000
This partnership is being liquidated. Ross and Milburn are each entitled to 30 percent of all profits and losses with the remaining 40 percent to Thomas.
a. What is the maximum amount that Milburn might have to contribute to this partnership because of the deficit capital balance?
b. To whom should the $9,000 cash that is presently available in excess of liabilities be distributed?
Ross
Thomas
Milburn
c. If the noncash assets are sold for a total of $49,000, what is the minimum amount of cash that Thomas could receive?
Part B
The partnership of Sampson, Klingon, Carton, and Romulan is being liquidated. It currently holds cash of $17,000 but no other assets. Liabilities amount to $32,000. The capital balances are as follows:
Sampson $ 17,000
Klingon (25,000 )
Carton 10,000
Romulan (17,000 )
Profits and losses are allocated on the following basis: Sampson, 40 percent, Klingon, 20 percent, Carton, 20 percent, and Romulan, 20 percent.a. If both Klingon and Romulan are personally insolvent, how much money must Carton contribute to this partnership?
b-1. If only Romulan is personally insolvent, how much money must Klingon contribute?
b-2. If only Romulan is personally insolvent, how will Klingon's contribution (funds) be disbursed?
c. If only Klingon is personally insolvent, how much money should Sampson receive from the liquidation?