Following is a series of independent cases . In each situation, indicate the cas
ID: 2419167 • Letter: F
Question
Following is a series of independent cases. In each situation, indicate the cash distribution to be made at the end of the liquidation process. Unless otherwise stated, assume that all solvent partners will reimburse the partnership for their deficit capital balances.
The Simon, Haynes, and Jackson partnership presently reports the following accounts. Jackson is personally insolvent and can contribute only an additional $9,000 to the partnership. Simon is also insolvent and has no available funds. (Leave no cells blank - be certain to enter "0" wherever required. Negative amounts and amounts to be deducted should be indicated with a minus sign.)
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Hough, Luck, and Cummings operate a local accounting firm as a partnership. After working together for several years, they have decided to liquidate the partnership’s property. The partners have prepared the following balance sheet:
The firm sells the noncash assets for $86,000; it will use $27,000 of this amount to pay liquidation expenses. All three of these partners are personally insolvent. (Leave no cells blank - be certain to enter "0" wherever required. Negative amounts and amounts to be deducted should be indicated with a minus sign.)
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Hough, Luck, and Cummings operate a local accounting firm as a partnership. After working together for several years, they have decided to liquidate the partnership’s property. The partners have prepared the following balance sheet:
Assume that the profits and losses are split 2:4:4 to Hough, Luck, and Cummings, respectively, and that liquidation expenses are only $12,000. The firm sells the noncash assets for $86,000; All three of these partners are personally insolvent. (Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations. Round your answers to the nearest dollar amount. Negative amounts and amounts to be deducted should be indicated with a minus sign.)
Following the liquidation of all noncash assets, the partnership of Redmond, Ledbetter, Watson, and Sandridge has the following account balances:
Redmond is personally insolvent. (Leave no cells blank - be certain to enter "0" wherever required. Negative amounts and amounts to be deducted should be indicated with a minus sign.)
a.The Simon, Haynes, and Jackson partnership presently reports the following accounts. Jackson is personally insolvent and can contribute only an additional $9,000 to the partnership. Simon is also insolvent and has no available funds. (Leave no cells blank - be certain to enter "0" wherever required. Negative amounts and amounts to be deducted should be indicated with a minus sign.)
Explanation / Answer
a.
cash balance = liabilities + simon capital + haynes loan and capital + Jackson capital
opening balance 36000 = 28000 + 22000 + 10000(adjusted against loan) + (24000)
contributed by jackson 9000 = 0 + 0 + 0 + 9000
balance 45000 = 28000 + 22000 + 10000 + (15000)
pay off liability (28000) = (28000) + 0 + 0 + 0
balance 17000 = 0 + 22000 + 10000 + (15000)
cash distribution (17000) = 0 + (6800) + (3400) + (6800)
Net balance to be adjusted 0 = 0 + 15200 + 6600 + (21800)
b.
cash + non current assets = liability + hough capital and loan + luck capital and loan + cumming
opening 26000 + 174000 = 38000 + 94000(adjusted) + 43000 (adjusted) + 25000
sale 86000 + (174000) = 0 + (44000) + (35200) + (8800)
Balance 112000 + 0 = 38000 + 50000 + 7800 + 16200
liquidation
expense (27000) + 0 = 0 + 0 + 0 + 0
Balance 85000 + 0 = 38000 + 50000 + 7800 + 16200
liability pay (38000) + 0 = (38000) + 0 + 0 + 0
balance 47000 + 0 = 0 + 50000 + 7800 + 16200
cash distribution (47000) + 0 = 0 + (23500) + (18800) + (4700)
balance to be adjusted 0 + 0 = 0 + 26500 + (11000) + 11500