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CH16 Safe Payments Schedule Answer BB

CH16 Safe Payments Schedule Answer BB - Noncash Assets...

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PARTNERSHIP DISSOLUTION AND LIQUIDATION Jas, Kal, and Lou decide to dissolve their partnership on May 1, 2010 and to liquidate their partnership as soon as possible after May 1. A condensed balance sheet with profit sharing percentages is as follows: Condensed Balance Sheet as of May 1, 2010 Assets Equities Cash $ 50,000 Accounts payable $120,000 Inventory (per books) 100,000 Jas capital 20% 40,000 Other assets (per books) 130,000 Kal capital 40% 80,000 Goodwill 20,000 Lou capital 40% 60,000 $300,000 $300,000 Additional information * The inventory was sold for $70,000 during May. * Other assets with a book value of $90,000 were sold for $50,000. * On June 1 the partners agree to distribute available cash immediately except for a $10,000 contingency fund. Appropriate distributions are based on a Statement of Partnership Liquidation and a Safe Payments Schedule.
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Answer: Jas, Kal, and Lou Partnership Statement of Partnership Liquidation from May 1 to June 1, 2010 Cash
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Unformatted text preview: Noncash Assets Priority Claims Jas Capital 20% Kal Capital 40% Lou Capital 40% Balances: May 1 $50,000 $250,000 $120,000 $40,000 $80,000 $60,000 Goodwill write-off (20,000) (4,000) (8,000) (8,000) Sale of inventory 70,000 (100,000) (6,000) (12,000) (12,000) Sale of other assets 50,000 (90,000) (8,000) (16,000) (16,000) Predistribution balances 170,000 40,000 120,000 22,000 44,000 24,000 Cash distribution: Priority claims Partners (120,000) (40,000) (120,000) (12,000) (24,000) (4,000) Balances $10,000 $40,000 $10,000 $20,000 $20,000 Jas, Kal, and Lou Partnership Safe Payments Schedule from May 1 to June 1, 2010 Jas Capital-20% Kal Capital-40% Lou Capital-40% Total Partner equities $22,000 $44,000 $24,000 $90,000 Loss on noncash assets (8,000) (16,000) (16,000) (40,000) Contingency fund (2,000) (4,000) (4,000) (10,000) Safe payments to partners $12,000 $24,000 $4,000 $40,000 Note the safe payment schedule's assumption that all noncash assets are losses....
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