Question

Assets Liability and capital

Cash 61,000

Land 235,000

Building 225,000

Liabilities 51,000

Adams Captial 156,500

Baker Capital 45,000

Carvil Capital 102,000

Dobbs Capital 166,500

d. Assume that profits and losses are allocated to Adams, Baker, Carvil, and Dobbs on a 1:3:4:2 basis, respectively. How much money must the firm receive from selling the land and building to ensure that Carvil receives a portion? (Do not round intermediate calculations.)

This is the last part of the entire question I figured out the rest but cannot seem to get this one. Thank you for the help

Attention: This is the rest of the problem, I actually only need the answer to d. I cannot seem to get it do right, and am not sure what I am missing

Thank You

The following balance sheet is for a local partnership in which the partners have become very unhappy with each other.

Cash	$ 61,000		Liabilities	$ 51,000
Land	235,000		Adams, capital	156,500
Building	225,000		Baker, capital	45,000
			Carvil, capital	102,000
			Dobbs, capital	166,500
Total assets	$521,000		Total liabilities and capital	$521,000

To avoid more conflict, the partners have decided to cease operations and sell all assets. Using this information, answer the following questions. Each question should be viewed as an independent situation related to the partnership’s liquidation.

a.	The $10,000 cash that exceeds the partnership liabilities is to be disbursed immediately. If profits and losses are allocated to Adams, Baker, Carvil, and Dobbs on a 2:3:3:2 basis, respectively, how will the $10,000 be divided?

      

b.	The $10,000 cash that exceeds the partnership liabilities is to be disbursed immediately. If profits and losses are allocated on a 2:2:3:3 basis, respectively, how will the $10,000 be divided?

       

c.

The building is immediately sold for $141,000 to give total cash of $202,000. The liabilities are then paid, leaving a cash balance of $151,000. This cash is to be distributed to the partners. How much of this money will each partner receive if profits and losses are allocated to Adams, Baker, Carvil, and Dobbs on a 1:3:3:3 basis, respectively? (Do not round intermediate calculations.)

       

d.	Assume that profits and losses are allocated to Adams, Baker, Carvil, and Dobbs on a 1:3:4:2 basis, respectively. How much money must the firm receive from selling the land and building to ensure that Carvil receives a portion? (Do not round intermediate calculations.)

Answer 1

Excess cash allocated (Liabilities over cash)

10000

Details	Ratio	Allocated excess cash	Original capital	Balance in capital	Ratio	Allocation of sale value of land and building
Adams, capital	1	1000	156,500	155,500	1	24500
Baker, capital	3	3000	45,000	42,000	3	73500
Carvil, capital	4	4000	102,000	98,000	4	98000
Dobbs, capital	2	2000	166,500	164,500	2	49000
					10	245000

Carvil should receive his capital amount of 98000 which is 4/10 of the sale value, there fore the sale value of land and building should be minimum, (98000/4)*10 = 245000