Problem 15-26 (LO 15-3) The partnership of Anderson, Berry. Hammond, and Winwood

Question

Problem 15-26 (LO 15-3) The partnership of Anderson, Berry. Hammond, and Winwood is being liquidated. It currently holds cash of $20.100 but no other assets. Liabilities amount to $31,500. The capital balances are Anderson (3e% of profits Berry (38%) Hammond (20%) winwood (28%) and losses) S 30,688 24,8e8 (29,808) (deficit) (37,888) (deficit) a. If both Hammond and Winwood are personally insolvent, how much money must Berry contribute to this partnership? b-1. If only Winwood is personally insolvent, how much money must Hammond contribute? b-2. If only Winwood is personally insolvent, how will Hammond's contribution (funds) be disbursed? c. If only Hammond is personally insolvent, how much money should Anderson receive from the liquidation? (Dnot round Intermediate calculations. Round your answers to the nearest whole dollar amount.) a. Berry's contribution Hammond's contribution bCreditors 2. Anderson Berry c. Anderson should receive

Explanation / Answer

a. If hammod and Winwood are insolvent:

Berry has to contribute 9000

b. if Winwood is insolvent:

Hammod to contribute 38250

b-2: out of hammod contribution of 38250, 11400 paid to outsiders, 16725 to Anderson, 10125 to berry will be disbursed

c:

Anderson will receive 19725 from the liquidation

Amounts - Debit/(Credit) Particulars Cash Liabilities Anderson Berry Hammond Winwood Opening balance 20100 -31500 -30600 -24000 29000 37000 Payment of liabilities -20100 20100 Balances 0 -11400 -30600 -24000 29000 37000 Hammond and Winwood allocation: 0 0 33000 33000 -29000 -37000 Balances 0 -11400 2400 9000 0 0

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