A partnership currently holds three assets: cash, $10,000; land, $35,000; and a building, $50,000. The partnership has
Question:
A partnership currently holds three assets: cash, $10,000; land, $35,000; and a building, $50,000. The partnership has no liabilities. The partners anticipate that expenses required to liquidate their partnership will amount to $5,000. Capital balances are
Ace, capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 25,000
Ball, capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,000
Eaton, capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
Lake, capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,000
The partners share profits and losses as follows: Ace (30 percent), Ball (30 percent), Eaton (20 percent), and Lake (20 percent). If a preliminary distribution of cash is to be made, what is the amount of safe payment that can be made to each partner?
Step by Step Answer:
Advanced Accounting
ISBN: 978-1259444951
13th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupni