Question

The partnership of Winn, Xie, Yang, and Zed has the following balance sheet:

Cash	$	53,000	Liabilities	$	68,000
Other assets		316,000	Winn, capital (50% of profits and losses)		83,000
			Xie, capital (30%)		102,000
			Yang, capital (10%)		63,000
			Zed, capital (10%)		53,000

Zed is personally insolvent, and one of his creditors is considering suing the partnership for the $4,000 that is currently owed. The creditor realizes that this litigation could result in partnership liquidation and does not wish to force such an extreme action unless Zed is reasonably sure of obtaining at least $4,000 from the liquidation.

Determine the amount for which the partnership must sell the other assets to ensure that Zed receives $4,000 from the liquidation. Liquidation expenses are expected to be $38,000. (Do not round intermediate calculations.)

Minimum amount

Answer 1

Total amounts to paid at the time of liquidation = Current Liability + Liquidation Expense = 68000 + 38000 = 106000

The cash balance held at 53000 and it will use set off the liability.So remaining balance of amount to paid is 53000 (106000 - 53000)

remaining 53000 by selling other assets

Zed's share = 10%

Amount of owing = 4000

Then the remaining capital as per zed capital= 4000 / 0.1 = 40000

So the net amount recieved from other assets will be = 53000 + 40000 = 93000

Answer will be 93000