Ch16 - Ch16 Student The ABC Partnership decided to...

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Ch16 Student: ___________________________________________________________________________ The ABC Partnership decided to terminate its affairs as of December 31, 2008. The following information is taken from the balance sheet that was prepared as of the date of termination: Partners A, B, and C share profits and losses 30:20:50, respectively. Each question below is independent of the others. 1. Refer to the above information. Assume that the noncash assets were sold for $1,200,000. After paying the outside creditors, how much cash would be distributed to C? A. $ 80,000 B. $100,000 C. $180,000 D. $610,000 2. Assume, instead, that the noncash assets were sold for $500,000 and that partner C was personally insolvent. After paying the outside creditors, how much cash would be distributed to B? A. $104,000 B. $192,000 C. $226,000 D. $360,000 The TKB partnership decided to terminate its affairs as of December 31, 2008. Partners K and B are personally insolvent. The following information was taken from the balance sheet prepared as of that date: 3. Refer to the above information. Assume the receivables and the fixed assets were sold for $380,000 and that all available cash was distributed to the partners. How much cash should be distributed to T? A. $168,000 B. $108,000 C. $100,000 D. $0
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4. Refer to the above information. Assume the receivables and the fixed assets were sold for $380,000 and that all available cash, except for $40,000 which is being held back for possible future liquidation costs, was distributed to the partners. How much cash should be distributed to B? A. $108,000 B. $ 48,000 C. $ 36,000 D. $ 20,000 5. Refer to the above information. For K to receive $32,000 from the liquidation process, how much cash must be realized from the sale of all of the noncash assets? A. $820,000 B. $650,000 C. $500,000 D. $480,000 6. Refer to the above information. If the noncash assets were sold for $340,000, how much cash would go to T? A. $96,000 B. $86,400 C. $80,000 D. $ 0 7. 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. X and Y have the same LAP 8. In the computation of a partner's Loss Absorption Power (LAP), the individual partner's net capital balance and profit-and-loss percentage are used in which of the following ways? A. B. C. D.
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9. During the liquidation of the FGH partnership, a cash distribution was made to all the partners, who share profits and losses 60%, 20%, and 20%, respectively. Assuming that the cash distribution referred to was made properly, how much would G receive if an additional $60,000 was distributed? A. $60,000
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This note was uploaded on 05/26/2011 for the course ACCT 410 taught by Professor Khalib during the Spring '11 term at Strayer.

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Ch16 - Ch16 Student The ABC Partnership decided to...

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