The balance sheet of the Maude, Ned, and Oscar partnership on November 1, 2014 (

Question

The balance sheet of the Maude, Ned, and Oscar partnership on November 1, 2014 (before commencement of partnership liquidation) was as follows: Cash $ 12,000 Georgia, capital (40%) $ 36,000 Holly, capital (30%) 6,000 Festus, capital (50%) 31,000 Total assets $ 90,000 Total liab./equity $ 90,000 Cash $ 70,000 Accounts payable $ 42,000 Inventory 60,000 Notes payable 68,000 Loan to Maude 10,000 Maude, capital (20%) 30,000 Loan to Oscar 18,000 Ned, capital (20%) 32,000 Plant assets-net 80,000 Oscar, capital (60%) 66,000 Total assets $ 238,000 Total liab./equity $ 238,000 Liquidation events in November were as follows: - All the inventory was sold for $10,000 above book value; - Plant assets with a book value of $60,000 were sold for $34,000. Determine how the available cash on November 31, 2014 should be distributed

Explanation / Answer

Schedule of cash payments in liquidation

non cash

Assets

maude

Capital

Ned

Capital

+ Oscar

Capital

Tranfer of

Loan of partner

Sale of non cash

Assets and distribution

Of loss

Calculation of loss on Nin cash assets=140000-104000=36000 divided in ratio of 20%,20%,60%

Cash +

non cash

Assets

= liabilities +

maude

Capital

+

Ned

Capital

+ Oscar

Capital

Beginning 70000 + 168000 = 110000 + 30000 + 32000 66000

Tranfer of

Loan of partner

+ (28000) = + (10000) + (18000)

Sale of non cash

Assets and distribution

Of loss

104000 + (140000) = + (7200) + (7200) (21600) New balance 174000 + 0 = 110000 + 12800 + 24800 26400 Payment of liabilities (110000) + = (110000) + + New balance 64000 + 0 = 0 + 12800 + 24800 26400 Cash distribution to partner (64000) + = - (12800) + (24800) (26400) Balance 0 + 0 = 0 + 0 + 0 0

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.