The partners of LR Company have decided to liquidate their business. Noncash ass

Question

The partners of LR Company have decided to liquidate their business. Noncash assets were sold for $119,840. The income ratios of the partners Cisneros, Gunselman, and Forren are 3:2:3, respectively. Complete the following schedule of cash payments for LR Company. (If an amount reduces the account balance then enter with a negative sign preceding the number e.g. -15,000 or parenthesis e.g.(15,000).) NoncashL Item Cash Assets Liabilities +Cisneros Capital+Gunselman Capital Forren Ca 15,600 Balance before liquidation Sale of noncesh assets and allocation of gain New balances Pay labilities New Balances Cash distribution to partners Final balances 94,800 $42,160 $20,930 $34,490 12,820

Explanation / Answer

Schedule of Cash Payments :-

Profit on Sale = Sale Value - Cost

= $119840 - $94800

= $25040

Profit Distribute in 3 : 2 : 3 Ratio

Items Cash NonCash Assets Liabilities Cisneros Capital Gunseiman Capital Forren Capital Balance Before Liquidation $15600 $94800 $42160 $20930 $34490 $12820 Sale of Noncash Assets 119840 (94800) 9390 6260 9390 New Balance 135440 0 42160 30320 40750 22210 Pay Liabilities (42160) (42160) New Balance 93280 0 0 30320 40750 22210 Cash Distribution to Partners (93280) 0 0 (30320) (40750) (22210) Final Balance 0 0 0 0 0 0

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