The Drysdale, Koufax, and Marichal partnership has the following balance sheet i
ID: 2574253 • Letter: T
Question
The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to liquidation:
Liquidation expenses are estimated to be $20,000. Prepare a predistribution schedule to guide the distribution of cash.
Assume that assets costing $98,000 are sold for $72,000. How is the available cash to be divided?
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Assume that assets costing $98,000 are sold for $72,000. Prepare loss allocation table.
Liquidation expenses are estimated to be $20,000. Prepare a predistribution schedule to guide the distribution of cash.
Assume that assets costing $98,000 are sold for $72,000. How is the available cash to be divided?
Cash $ 60,000 Liabilities $ 56,000 Noncash assets 324,000 Drysdale, loan 40,000 Drysdale, capital (50%) 106,000 Koufax, capital (30%) 96,000 Marichal, capital (20%) 86,000Explanation / Answer
Loss to be allocated = $98000 - $72000 = $26000 Partner Capital balance Loss Allocation ratio Maximum loss that can be absorbed Schedule 1 Drysdale $106,000.00 50% $13,000.00 Koufax $96,000.00 30% $7,800.00 Marichal $86,000.00 20% $5,200.00 Liquidation expenses to be allocated $20,000 Partner Capital balance Liquidation expense Allocation ratio Allocation of Liquidation expenses Schedule 2 Drysdale $106,000.00 50% $10,000.00 Koufax $96,000.00 30% $6,000.00 Marichal $86,000.00 20% $4,000.00 DRYSLADE, KOUFAX, AND MARICHAL Distribution of Available Cash Available Cash Distribution of Cash Cash balance $60,000.00 Liabilities $56,000.00 Sale of assets $298,000.00 Liquidation Expenses $20,000.00 Drysdale, loan $40,000.00 Distribution among partners - Drysdale Capital $83,000.00 - Koufax Capital $82,200.00 - Marichal Capital $76,800.00 Total $358,000.00 Total $358,000.00 Drysdale Koufax Marichal Reported balances $106,000 $96,000 $86,000 Assumed Loss $13,000 $7,800 $5,200 Schedule 1 Adjusted balances $93,000 $88,200 $80,800 Assumed Loss $10,000 $6,000 $4,000 Schedule 2 Adjusted balances $83,000 $82,200 $76,800
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