Sedgwick Company at December 31 has cash $20,000, noncash assets $100,000, liabi
ID: 2419950 • Letter: S
Question
Sedgwick Company at December 31 has cash $20,000, noncash assets $100,000, liabilities $55,000, and the following capital balances: Floyd $45,000 and DeWitt $20,000. The firm is liquidated, and $105,000 in cash is received for the noncash assets. Floyd and DeWitt income ratios are 60% and 40%, respectively.
Prepare a schedule of cash payments. (If an amount reduces the account balance then enter with a negative sign preceding the number e.g. -15,000 or parenthesis e.g. (15,000).)
SEDGWICK COMPANY
Schedule of Cash Payments
Item
Cash
Noncash Assets
Liabilities
Floyd, Capital
DeWitt, Capital
$20,000
$100,000
$55,000
$45,000
$20,000
SEDGWICK COMPANY
Schedule of Cash Payments
Item
Cash
+Noncash Assets
=Liabilities
+Floyd, Capital
+DeWitt, Capital
Balances before liquidation$20,000
$100,000
$55,000
$45,000
$20,000
Sale of noncash assets and allocation of gain New balances Pay liabilities New balances Cash distribution to partners Final balances$
$
$
$
$
Explanation / Answer
Items Cash + Non cash Assets = Liabilities + Floyd Capital + Dewitt capital Balances before liquidation 20000 100000 55000 45000 20000 Sale of noncash assets and allocation of gain 105000 -100000 0 3000 2000 New balances 125000 0 55000 48000 22000 Pay liabilities -55000 0 -55000 0 0 New balances 70000 0 0 48000 22000 Cash distribution to partners -70000 0 0 -48000 -22000 Final balances 0 0 0 0 0