Question

Cash $ 72,240 Liabilities $ 48,500 Noncash assets 134,000 Delphine, capital 91,600 Xavier, capital 57,000 Olivier,...

Cash $ 72,240 Liabilities $ 48,500
Noncash assets 134,000 Delphine, capital 91,600
Xavier, capital 57,000
Olivier, capital 9,140
Total assets $ 206,240 Total liabilities and capital $ 206,240


Delphine, Xavier, and Olivier share profits and losses in the ratio of 5:4:1, respectively. The partners have agreed to terminate the business and estimate that $15,400 in liquidation expenses will be incurred.

What is the amount of cash that safely can be paid to partners prior to liquidation of noncash assets?

Which partner should receive the cash distribution from (a)?

a.

What is the amount of cash that safely can be paid to partners prior to liquidation of noncash assets?
Cash that safely can be distributed: ?

b.

Which partner should receive the cash distribution from (a)?
Delphineradio
Xavierradio
Olivierradio
Business   Accounting   
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Answer #1
Ans a In $
Cash that can be safely distributed 8340
Cash-liabilities-liquidation expenses
72240-48500-15400 8340
ans b
Potential loss+Liquidation exp (15400+134000) 149400
Allocation
Delphine xavier Olivier
Opening bal 91600 57000 9140
allocation of potential loss 134000*(5:4:1) -67000 -53600 -13400
Liquidation expenses 15400*(5:4:1) -7700 -6160 -1540
16900 -2760 -5800
As Delphine radio has surplus capital balance he should be given safe cash of $8340 any doubt please comment
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