A real estate partnership had the following condensed balance sheet prior to liquidation: The percentages in parentheses
Question:
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The percentages in parentheses after the partners€™ capital balances represent their respective interests in profits and losses. The following situations are independent of each other unless otherwise stated:
1. If assets with a book value of $30,000 were sold for $20,000, how much of the available cash could be distributed to Partner A?
2. If assets with a book value of $60,000 were sold for $70,000, how much of the available cash could be distributed to Partner A?
3. Assume assets with a book value of $70,000 were sold for $50,000 and that all available cash was distributed. For what amount would the remaining assets have to be sold in order for Partner B to receive a total of $79,000 cash from all liquidation activities?
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Liquidation
Liquidation in finance and economics is the process of bringing a business to an end and distributing its assets to claimants. It is an event that usually occurs when a company is insolvent, meaning it cannot pay its obligations when they are due.... Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...
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1 None of the cash would be distributed to Partner A because the outside creditors claims must be sa...View the full answer
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