Question

Sedgwick Company at December 31 has cash $24,000, noncash assets $105,000, liabilities $50,200, and the following capital balance : Floyd $43,200 and Dewitt $35,600. The firm is liquidated, and $117,000 in cash is received for the noncash assets. Floyd and Dewitt income rations are 60% and 40% respectively.

Sedgwick Company

Schedule of cash payment

Items cash + Noncash assets= liabilities + Floyd, Capital+ Dewitt, Capital

balance before liquidation $24,000 $105,000 $50,200 $43,200 $35,600

sales of noncash asssets and allocation gain --------- ------------------- ------------- ------------ ---------------------------

new balances --------------- ---------------------- ------------------ ------------------ ------------------------------

pay liabilities ----------- ------------------------ ------------------------- ------------- --------------------------------

new balances ----------------- ---------------------------- ------------------------ ------------- ------------------

cash distribution to partners --------------- --------------------- ------------------- ------------------ -------------------

final balances --------------- --------------------------------- -------------------- --------------- ------------------

Answer 1

Sedgwick Company

Schedule of cash payment

	Cash	Non cash assets	liabilities	Floyd, Capital	Dewitt, Capital
Balance before liquidation	24,000	105,000	50,200	43,200	35,600
sales of non cash assets and allocation of gain	117,000	- 105,000	0	7,200	4,800
new balances	141,000	0	50,200	50,400	40,400
payment of liabilities	- 50,200		- 50,200
new balances	90,800	0	0	50,400	40,400
cash distribution to partners	- 90,800	0	0	- 50,400	- 40,400
final balances	0	0	0	0	0

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