The following balance sheet is for a local partnership in whichthe partners have become very unhappy with each other.
Cash $ 42,000 Liabilities $ 32,000 Land 140,000 Adams, capital 85,000 Building 130,000 Baker, capital 36,000 Carvil, capital 64,000 Dobbs, capital 95,000 Total assets $312,000 Total liabilities andcapital $312,000
To avoid more conflict, the partners have decided to ceaseoperations and sell all assets. Using this information, answer thefollowing questions. Each question should be viewed as anindependent situation related to the partnershipâsliquidation.
a. The $10,000 cash that exceeds the partnership liabilities is tobe disbursed immediately. If profits and losses are allocated toAdams, Baker, Carvil, and Dobbs on a 2:3:3:2 basis, respectively,how will the $10,000 be divided? (Leave no cells blank - becertain to enter "0" wherever required.)
Adams $ Baker $ Carvil $ Dobbs $
b. The $10,000 cash that exceeds the partnership liabilities is tobe disbursed immediately. If profits and losses are allocated on a2:2:3:3 basis, respectively, how will the $10,000 be divided?(Leave no cells blank - be certain to enter "0" whereverrequired.)
Adams $ Baker $ Carvil $ Dobbs $
c. The building is immediately sold for $72,000 to give total cashof $114,000. The liabilities are then paid, leaving a cash balanceof $82,000. This cash is to be distributed to the partners. Howmuch of this money will each partner receive if profits and lossesare allocated to Adams, Baker, Carvil, and Dobbs on a 1:3:3:3basis, respectively? (Leave no cells blank - be certain toenter "0" wherever required. Do not round intermediatecalculations. Round your answers to the nearest dollaramount.)
Adams $ Baker $ Carvil $ Dobbs $
d. Assume that profits and losses are allocated to Adams, Baker,Carvil, and Dobbs on a 1:3:4:2 basis, respectively. How much moneymust the firm receive from selling the land and building to ensurethat Carvil receives a portion? (Do not round intermediatecalculations.)
Minimum amount $
The following balance sheet is for a local partnership in whichthe partners have become very unhappy with each other.
| Cash | $ 42,000 | Liabilities | $ 32,000 | |
| Land | 140,000 | Adams, capital | 85,000 | |
| Building | 130,000 | Baker, capital | 36,000 | |
| Carvil, capital | 64,000 | |||
| Dobbs, capital | 95,000 | |||
| Total assets | $312,000 | Total liabilities andcapital | $312,000 | |
To avoid more conflict, the partners have decided to ceaseoperations and sell all assets. Using this information, answer thefollowing questions. Each question should be viewed as anindependent situation related to the partnershipâsliquidation. |
| a. | The $10,000 cash that exceeds the partnership liabilities is tobe disbursed immediately. If profits and losses are allocated toAdams, Baker, Carvil, and Dobbs on a 2:3:3:2 basis, respectively,how will the $10,000 be divided? (Leave no cells blank - becertain to enter "0" wherever required.) |
| Adams | $ |
| Baker | $ |
| Carvil | $ |
| Dobbs | $ |
| b. | The $10,000 cash that exceeds the partnership liabilities is tobe disbursed immediately. If profits and losses are allocated on a2:2:3:3 basis, respectively, how will the $10,000 be divided?(Leave no cells blank - be certain to enter "0" whereverrequired.) |
| Adams | $ |
| Baker | $ |
| Carvil | $ |
| Dobbs | $ |
| c. | The building is immediately sold for $72,000 to give total cashof $114,000. The liabilities are then paid, leaving a cash balanceof $82,000. This cash is to be distributed to the partners. Howmuch of this money will each partner receive if profits and lossesare allocated to Adams, Baker, Carvil, and Dobbs on a 1:3:3:3basis, respectively? (Leave no cells blank - be certain toenter "0" wherever required. Do not round intermediatecalculations. Round your answers to the nearest dollaramount.) |
| Adams | $ | |
| Baker | $ | |
| Carvil | $ | |
| Dobbs | $ | |
| d. | Assume that profits and losses are allocated to Adams, Baker,Carvil, and Dobbs on a 1:3:4:2 basis, respectively. How much moneymust the firm receive from selling the land and building to ensurethat Carvil receives a portion? (Do not round intermediatecalculations.) |
| Minimum amount | $ |
Related questions
1. A partnership has the following capital balances: A ( 20% ofprofits and losses) $ 100,000 B ( 30% of profits and losses) $120,000 C ( 50% of profits and losses) $ 180,000 If the partnershipis to be liquidated and $ 30,000 becomes immediately available, whogets that money? Show your work: 2. The following balance sheet isfor a local partnership in which the partners have become veryunhappy with each other. To avoid more conflict, the partners havedecided to cease operations and sell all assets. Using thisinformation, answer the following questions. Each question shouldbe viewed as an independent situation related to the partnershipsliquidation. a. The $ 10,000 cash that exceeds the partnershipliabilities is to be disbursed immediately. If profits and lossesare allocated to Adams, Baker, Carvil, and Dobbs on a 2: 3: 3: 2basis, respectively, how will the $ 10,000 be divided? b. The $10,000 cash that exceeds the partnership liabilities is to bedisbursed immediately. If profits and losses are allocated on a 2:2: 3: 3 basis, respectively, how will the $ 10,000 be divided? Showyour work.
| A, Capital | B, Capital | C, Capital | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reported Balances | $ 100,000 | $ 120,000 | $ 180,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Assumed $370,000 loss | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Potential balances | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Potential loss from C'sdeficit* | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current cash distribution | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| *The split is 20/30 or 40%/60%
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1. A partnership has the following capital balances: A ( 20% ofprofits and losses) $ 100,000 B ( 30% of profits and losses) $120,000 C ( 50% of profits and losses) $ 180,000 If the partnershipis to be liquidated and $ 30,000 becomes immediately available, whogets that money? Show your work: 2. The following balance sheet isfor a local partnership in which the partners have become veryunhappy with each other. To avoid more conflict, the partners havedecided to cease operations and sell all assets. Using thisinformation, answer the following questions. Each question shouldbe viewed as an independent situation related to the partnershipsliquidation. a. The $ 10,000 cash that exceeds the partnershipliabilities is to be disbursed immediately. If profits and lossesare allocated to Adams, Baker, Carvil, and Dobbs on a 2: 3: 3: 2basis, respectively, how will the $ 10,000 be divided? b. The $10,000 cash that exceeds the partnership liabilities is to bedisbursed immediately. If profits and losses are allocated on a 2:2: 3: 3 basis, respectively, how will the $ 10,000 be divided? Showyour work.
A, Capital B, Capital C, Capital Reported Balances $ 100,000 $120,000 $ 180,000 Assumed $370,000 loss Potential balancesPotential loss from C's deficit* Current cash distribution *Thesplit is 20/30 or 40%/60% Requirement A: Since the partnershipcurrently has total capital of $260,000, the $10,000 that isavailable would indicate maximum potential losses of $250,000.Adams, Baker, Carvil, Dobbs, Capital Capital Capital CapitalReported Balances Assumed $250,000 loss (2:3:3:2) Potentialbalances Potential loss from deficits (1:1) Current cashdistribution Requirement
1. A partnership has the following capital balances: A ( 20% ofprofits and losses) $ 100,000 B ( 30% of profits and losses) $120,000 C ( 50% of profits and losses) $ 180,000 If the partnershipis to be liquidated and $ 30,000 becomes immediately available, whogets that money? Show your work
| Answer#1 | A | B | C | Total |
| ReportedBalances | 100000 | 120000 | 180000 | 400000 |
| Anticipated loss($370,000) ie 400000-30000 rati 2:3:5 | -74000 | -111000 | -185000 | -370000 |
| Potentialbalances | 26000 | 9000 | -5000 | 30000 |
| Potential lossfrom C's deficit (split 2:3) | -2000 | -3000 | ||
| Currentcash distribution | 24000 | 6000 |
B: Same cash to distribute, different allocations:Adams, Baker, Carvil, Dobbs, Capital Capital Capital CapitalReported Balances Assumed $250,000 loss (2:2:3:3) Potentialbalances, Step 1 Potential loss from deficits (4:6) Potentialbalances, Step 2 Potential loss from deficit (100%) Current cashdistribution.
