24 May Question 22. The capital balances, prior to the liquidation of the XYZ partnership, were as foll
Question
22. The capital balances, prior to the liquidation of the XYZ partnership, were as follows: 
X, Y, and Z share profits and losses in the ratio of 5:3:2. As a result of a loan, the partnership owes Y $80,000. Using the information above, which partner has the highest Loss Absorption Power (LAP) prior to liquidation?
A. X
B. Y
C. Z
D. Both X and Y
25. On December 1, 20X9, the partners of Tim, Williams, and Levin, who share profits and losses in the ratio of 4:4:2, decided to liquidate their partnership. On this date the partnership condensed balance sheet was
as follows:
On December 11, 20X9, the first cash sale of other assets with a carrying amount of $200,000 realized $140,000. Safe installment payments to the partners were made on the same date. How much cash should
be distributed to each partner?
A. Option A
B. Option B
C. Option C
D. Option D
Tom, Dick, and Harry are partners in an equipment leasing business that has not been able to generate the type of revenue expected by the partners. They share profits and losses in a ratio of 5:3:2. They have decided to liquidate the business and have sold all the assets except for one piece of heavy machinery. All partnership liabilities have been settled and all the partners are personally insolvent. The machinery has a book value of $85,000, and the partners have capital account balances as follows:
Each of the following are independent cases.
26. Refer to the information given above. What amount of cash will each partner receive as a liquidating
distribution if the machinery is sold for 65,000 dollars?
A. Option A
B. Option B
C. Option C
D. Option D
27. Refer to the information given above. What amount of cash will each partner receive as a liquidating
distribution if the machinery is sold for 33,000 dollars?
A. Option A
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