Question 19 On its schedule of liquidation, what is the cash balance on Feb 28?

Question

Question 19

On its schedule of liquidation, what is the cash balance on Feb 28?

$250,300

$253,000

$290,500

$280,300

$250,300

$253,000

$290,500

$280,300

The partnership of Wingler, Norris Rodgers, and Guthrie was formed several years ago as a architectural firm. Several partnersrecently had personal financdal problem s and deded to terminate operations and liquidate the business. The following balance sheet summarizec its financial information on January 5 at the beginning of this process: Cash Accounts Receivable InventorY Land Building and Equipment inet Total Assets $17,000 80,000 100,000 57,000 193,000 447,000 Liabilities Rodgers Loan Wingler, Capital Norris, Capital Rodgers Capital Gu thrie, Capital Total Liabilities and Capital $79,000 25,000 141,000 100,000 62,000 40.000 47,000 The estimated liquidation expenses were Profit and loss allocation ratio according to the provisions of par tnership agreement: 18,000 Norris Rodgers Guthrie 20% 10% 30% The following transactions occurred during the liquidation: Jan. 14 Collected 70% of the total accounts receivalbe with the rest judged to be uncollectible Feb. 23 Sold the land, building and equipment for Mar. 1 Made safe capital distributions Mar.29 Learned that Guthrie became personally in solvent Apr, 3 Pa liabilitie s Jun. 30 Sold all inventory for 70% 180,000 55,000 ul 1 Made safe capital distributions again Sep, 26 Paid liquidation expenses Nov, 4 Made final cash distrubtions to the partners based on the assumption that all partners except Guthrie are personally solvent. 15,000

Explanation / Answer

Cash balance on Feb. 28 = Cash balance on Jan. 5 + 70% of Accounts Receivable collected on Jan. 14 + Sale value of land, building and equipment sold on Feb. 23

= 17,000 + (80,000*70%) + 180,000

= 17,000 + 56,000 + 180,000

= 253,000

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