The following condensed balance sheet is for the partnership of Hardwick, Saunde

Question

The following condensed balance sheet is for the partnership of Hardwick, Saunders, and Ferris, who share profits and losses in the ratio of 4:3:3, respectively:

The partners decide to liquidate the partnership. Forty percent of the other assets are sold for $115,000. Prepare a proposed schedule of liquidation at this point in time.

Cash $ 89,000 Accounts payable $ 60,000 Other assets 820,000 Ferris, loan 54,000 Hardwick, loan 55,000 Hardwick, capital 340,000 Saunders, capital 260,000 Ferris, capital 250,000 Total assets $ 964,000 Total liabilities and capital $ 964,000

Explanation / Answer

HARDWICK, SAUNDERS, AND FERRIS

Proposed Schedule of Liquidation

Sale of other asset :820000*.40 = 328000 costing sold for 115000 resulting inloss of 328000-115000= 213000

Other than this asset :820000*.60= 492000

Total cash received on sale : 115000+492000= 607000

HARDWICK, SAUNDERS, AND FERRIS

Proposed Schedule of Liquidation

cash other asset Accounts payable Hardwick, Loan and Capital Saunders, Capital Ferris, Loan & Capital beginning balance 89000 820000 60000 285000 [340000-55000] 260000 304000 [250000+54000] sold asset 115000 (328000) (85200)   [213000*4/10] (63900)    [213000*3/10] (63900) Assumed: loss on remaining assets 0 (492000) (196800)    [492000*4/10] (147600) (147600) Paid liabilities (60000) (60000) safe balance 144000 0 0 3000 48500 92500

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