Following is a series of independent cases. In each situation, indicate the cash distribution to be made to partners at
Posted: Mon May 02, 2022 7:24 am
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 $14,000 to the
partnership. Cash $ 135,000 Liabilities 40,000 Monte, loan 30,000
Buarque, capital (50% of profits and losses) 40,000 Monte, capital
(25%) 45,000 Vinicius, capital (25%) (20,000 ) (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: Cash $ 25,000 Liabilities $
39,500 Drawdy, loan 10,000 Langston, loan 16,000 Noncash assets
160,000 Drawdy, capital (40%) 70,000 Langston, capital (30%) 55,000
Pearl, capital (30%) 14,500 Total assets $ 195,000 Total
liabilities and capital $ 195,000 The firm sells the noncash assets
for $125,000; it will use $20,000 of this amount to pay liquidation
expenses. All three of these partners are personally insolvent.
Part C 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: Cash $ 25,000
Liabilities $ 39,500 Drawdy, loan 10,000 Langston, loan 16,000
Noncash assets 160,000 Drawdy, capital 70,000 Langston, capital
55,000 Pearl, capital 14,500 Total assets $ 195,000 Total
liabilities and capital $ 195,000 The firm sells the noncash assets
for $125,000; it will use $11,000 of this amount to pay liquidation
expenses. All three of these partners are personally insolvent.
Assume that the profits and losses are split 2:4:4 to Drawdy,
Langston, and Pearl, respectively. Part D Following the liquidation
of all noncash assets, the partnership of Krups, Lindau, Riedel,
and Schnee has the following account balances. Krups is personally
insolvent. Liabilities $ 9,000 Krups, loan 11,000 Krups, capital
(30% of profits and losses) (30,000 ) deficit Lindau, capital (30%)
(35,000 ) deficit Riedel, capital (20%) 20,000 Schnee, capital
(20%) 25,000
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 $14,000 to the
partnership. Cash $ 135,000 Liabilities 40,000 Monte, loan 30,000
Buarque, capital (50% of profits and losses) 40,000 Monte, capital
(25%) 45,000 Vinicius, capital (25%) (20,000 ) (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: Cash $ 25,000 Liabilities $
39,500 Drawdy, loan 10,000 Langston, loan 16,000 Noncash assets
160,000 Drawdy, capital (40%) 70,000 Langston, capital (30%) 55,000
Pearl, capital (30%) 14,500 Total assets $ 195,000 Total
liabilities and capital $ 195,000 The firm sells the noncash assets
for $125,000; it will use $20,000 of this amount to pay liquidation
expenses. All three of these partners are personally insolvent.
Part C 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: Cash $ 25,000
Liabilities $ 39,500 Drawdy, loan 10,000 Langston, loan 16,000
Noncash assets 160,000 Drawdy, capital 70,000 Langston, capital
55,000 Pearl, capital 14,500 Total assets $ 195,000 Total
liabilities and capital $ 195,000 The firm sells the noncash assets
for $125,000; it will use $11,000 of this amount to pay liquidation
expenses. All three of these partners are personally insolvent.
Assume that the profits and losses are split 2:4:4 to Drawdy,
Langston, and Pearl, respectively. Part D Following the liquidation
of all noncash assets, the partnership of Krups, Lindau, Riedel,
and Schnee has the following account balances. Krups is personally
insolvent. Liabilities $ 9,000 Krups, loan 11,000 Krups, capital
(30% of profits and losses) (30,000 ) deficit Lindau, capital (30%)
(35,000 ) deficit Riedel, capital (20%) 20,000 Schnee, capital
(20%) 25,000