29 Jun Question Following is a ser
Question
Following is a series of independent cases. In each situation, indicate the cash distribution to be
made at the end of the liquidation process. Unless otherwise stated, assume that all solvent partners
will reimburse the partnership for their deficit capital balances.
Part A
The Simon, Haynes, and Jackson partnership presently reports the following accounts. Jackson is
personally insolvent and can contribute only an additional $3,000 to the partnership. Simon is also
insolvent and has no available funds.
LO4
LO1, LO3
Part B
Hough, Luck, and Cummings operate a local accounting firm as a partnership. After working
together for several years, they have decided to liquidate the partnership’s property. The partners have
prepared the following balance sheet:
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 30,000
Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,000
Haynes, loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000
Simon, capital (40%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,000
Haynes, capital (20%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,000)
Jackson, capital (40%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12,000)
Cash . . . . . . . . . . . . . . . . . $ 20,000 Liabilities . . . . . . . . . . . . . . . . . . . $ 40,000
Hough, loan . . . . . . . . . . . . 8,000 Luck, loan . . . . . . . . . . . . . . . . . . 10,000
Noncash assets . . . . . . . . . . 162,000 Hough, capital (50%) . . . . . . . . . 90,000
Luck, capital (40%) . . . . . . . . . . . 30,000
Cummings, capital (10%) . . . . . . 20,000
Total assets . . . . . . . . . . . $190,000 Total liabilities and capital . . . . $190,000
The firm sells the noncash assets for $80,000; it will use $21,000 of this amount to pay liquidation
expenses. All three of these partners are personally insolvent.
Part C
Use the same information as in Part B, but assume that the profits and losses are split 2:4:4 to
Hough, Luck, and Cummings, respectively, and that liquidation expenses are only $6,000.
Part D
Following the liquidation of all noncash assets, the partnership of Redmond, Ledbetter, Watson, and
Sandridge has the following account balances:
Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 28,000
Redmond, loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000
Redmond, capital (20%) . . . . . . . . . . . . . . . . . . . . . . . . . . . (21,000)
Ledbetter, capital (10%) . . . . . . . . . . . . . . . . . . . . . . . . . . . (30,000)
Watson, capital (30%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000
Sandridge, capital (40%) . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000
Redmond is personally insolvent.
Tutorials for this Question
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.