The ABC partnership reports the following condensed balance sheet: Cash $ 480,000 Liabilities $2,000,000 Noncash assets 3,160,000 Partner A, capital 290,000 Partner B, capital 1,100,000 Partner C, capital 250,000 Total assets $3,640,000 Total liabilities and partner capital $3,640,000 The partners wish to liquidate the partnership. The noncash assets are sold for $2,300,000 with the loss distributed to the partners in the ratio of 30%/30%/40% to partner A, B, and C, respectively. The liabilities are paid in full. Assume that any partners with a negative balance in their respective Capital Accounts are insolvent and, therefore, do not make any capital contribution to the partnership (i.e., remaining partners must absorb the negative Capital Account according to their profit sharing formula). Required: Prepare a schedule detailing the liquidation of the assets, repayment of the liabilities and distribution of the remaining cash to the partners.
|Sell noncash assets||2300000||-3160000||0||-258000||-258000||-344000|
|Payment of liabilities||-2000000||0||-2000000||0||0||0|
|C's loss distribution (3:3)||0||0||-47000||-47000||94000|
|A's loss distributed to B||0||0||0||15000||-15000||0|
|Cash distribution to partners||-780000||0||0||0||-780000||0|
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