Following is a series of independent cases. In each situation, indicate the cash
ID: 2522051 • Letter: F
Question
Following is a series of independent cases. In each situation, indicate the cash distribution to be made to partners at the end of the liquidation process. Unless otherwise stated, assume that all solvent partners will reimburse the partnership for their deficit capital balances. Part A The Buarque, Monte, and Vinicius partnership reports the following accounts. Vinicius is personally insolvent and can contribute only an additional $20,000 to the partnership Cash Liabilities Monte, loan Buarque, capital (50% of profits Monte, capital (25%) vinicius , capital (25%) $141,000 46,000 42,000 28,000 51,000 and losses) (26,000) (deficit) Part B Drawdy, Langston, and Pearl 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: 31,000 Liabilities 16,000 172,000 Drawdy, capital (40%) 40,500 24,000 76,000 61,000 17,500 $219,000 Cash Drawdy, loan Noncash assets Langston, loan Langston, capital (30%) Pearl, capital (30%) Totalassets $219,000 Total liabilities and capitalExplanation / Answer
Part A Buarque Capital Monte Loan and Capital Vinicus Capital Beginign Balance 28000 93000 -26000 Contribution by Vinicus 20000 Capital Balance 28000 93000 -6000 Elimination of Vinicius deficit (50:25) -4000 -2000 6000 Final Distribution 24000 91000 0 Part B Drawdy Loand and capital Langston Loan and Capital Pearl Capital Beginign Balance 60000 85000 17500 Loss on disposal (40:30:30) 172000-131000 -16400 -12300 -12300 Liquidation Expense 26000 in 40:30:30 -10400 -7800 -7800 Capital Balance 33200 64900 -2600 Elimination of Pearl's deficit 40:30 -1486 -1114 2600 Final Distribution 31714 63786 0 Part C Drawdy Loand and capital Langston Loan and Capital Pearl Capital Beginign Balance 60000 85000 17500 Loss on disposal (2:4:4) 172000-131000 -8200 -16400 -16400 Liquidation Expense 17000 in 2:4:4 -3400 -6800 -6800 Capital Balance 48400 61800 -5700 Elimination of Pearl's deficit 2:4 -1900 -3800 5700 Final Distribution 46500 58000 0 Part D Karup, Loan and Capital Lindau Capital Riedel Capital Schnee Capital Beginign Balance -25000 -41000 26000 31000 Allocation of Krup's Deficit Balance 3:2:2 25000 -10714 -7143 7143 Capital Balance 0 -51714 18857 38143 Contribution by Lindau 51714 Final Distribution 0 0 18857 38143