Question 25 The accountant made safe capital distribution on March 1. How much c

Question

Question 25

The accountant made safe capital distribution on March 1. How much cash did Norris receive from this distribution?

$50,857

$42,714

$0

$50,284

$50,857

$42,714

$0

$50,284

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

Norris didnt receive any cash from distribution

Thank You

Particulars Possible losses Wingler(40%) Norris(20%) Rodgers(10%) Gutherie(30%) Partners equities(Capital+/- loans) 141000 100000 87000 40000 Possible loss on non cash assets 430000 (172000) (86000) (43000) (129000) (31000) 14000 44000 (89000) Cash withheld for expenses 18000 (7200) (3600) (1800) (5400) (38200) 10400 42200 (94400) Wingler and Guthie debit balance adjusted 38200 (46410) (86190) 94400

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