Question

Liquidation—Cash distribution computation, safe payments schedule Fed, Ela, and Luc have decided to liquidate their partnership....

Liquidation—Cash distribution computation, safe payments schedule
Fed, Ela, and Luc have decided to liquidate their partnership. Account balances on January 1, 2016, are as follows:
Cash 160000 Accounts Payable 60000
Other Assets 180000 Fed Capital (30%) 110000
340000 Ela Capital (30%) 50000
Luc Capital (40%) 120000
340000
The partners agree to keep a $30,000 contingency fund and to distribute available cash immediately.
Required:
Determine the amount of cash that should be paid to each partner

Homework Answers

Answer #1

Answer-Statement showing amount paid definition to each partner

Particulars Amount Payable Fed'Captial Ela'capital Luc'Capital
Opening balance 60000 110000 50000 120000

Cash balance-160000

Less Retained as contingency fund -(30000)

Less amount paid to account payable -(60000)

Balance   -70000 This amount distruibuted to partner in 3:3:4 ratio

(60000) (21000) (21000) (28000)

Less amount realised from other assets- 180000

distruibuted in partner in 3:3:4 ratio

(54000) (54000) (72000)
Closing Balance 35000(Loss) 25000(gain) 20000(loss)
Gain of partner ela should be allocate between fed and luc in ratio of 3:4 10714 - 14286
Net loss 24286 5714
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