ones, Marge, and Tate LLP decided to dissolve and liquidate the partnership on S

Question

ones, Marge, and Tate LLP decided to dissolve and liquidate the partnership on September 30, 2018. After realization of a portion of the noncash assets, the capital account balances were Jones $50,000; Marge $40,000; and Tate $15,000. Cash of $35,000 and other assets with a carrying amount of $100,000 were on hand. Creditors' claims totaled $30,000. Jones, Marge, and Tate shared net income and losses in a 2:1:1 ratio, respectively.

Prepare a working paper to compute the amount of cash that may be paid to creditors and to partners at this time, assuming that no partner is solvent. (note compute the cash payment)

Explanation / Answer

PARTNER'S CAPITAL Particulars Assets Liabilities Jones Marge Tate Sharing Ratio Cash + Other Assets 50% 25% 25% Balance Before Liquidation $         1,35,000 $          30,000 50000 40000 15000 Less: Payment to Creditors $           -30,000 $        -30,000 Balance after Offset the Creditors $         1,05,000 # $                   -   $               50,000 $              40,000 $                    15,000 Payment to Partner's Against there capital $       -1,05,000 # $              -50,000 $            -40,000 $                  -15,000 Balance After Payment of Capital $                      -   $                         -   $                       -   $                             -   There is no Excess balance after payment of Capital Balance

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