After working for in the Kitchen remodeling business for several years, Terry and Phylls decided to go into business for themselves and formed the Kitchens Just for You partnership. Three years ago, they admitted Connie as a partner and recognized goodwill at that time because of her good client list for planned kitchen makeovers. Howeverthey were not able to gain a sufficient market for new customers and on September 1, 20x9, they agreed to dissolve and liquidate the business. They decided on an installment liquidation to complete the projects already initiated. The balance sheet, with profit and loss-sharing percentages at the beginning of liquidation, Is as follows: Assets Cash Receivables Terry, Loan Inventory Goodwill Total Assets KITCHENS JUST FOR YOU Balance sheet September 1, 20X9 Liabilities and Equities $ 10,000 Accounts Payable 63,000 Connte, Loan 5,000 Terry, Capital (30) 44,000 Phyllis, Capital (501) 23,000 Connie, Capital (201) $145,000 Total Liabilities. quities $ 49,000 12,000 10,000 35,000 39.000 $145,000 Connie's loan was for working capital; the loan to Terry was for his unexpected personal medical bills. During September 20x9, the first month of liquidation, the partnership collected $46,000 in receivables and decided to write off $7000 of the remaining receivables, Sales of one-half of the book value of the Inventory realized a loss of $5,000. The partners estimate that the costs of liquidating the business (newspaper ads, signs, etc.), are expected to be $7,000 for the remainder of the liquidation process Required: Prepare a schedule of sofe payments to partners as of September 30, 20x9, to show how the available cosh should be distributed to the partners. Please follow the practical guidelines when completing this worksheet. KITCHENS JUST FOR YOU Schedule of Safe Payments to Partners Terry Phyllis Connie Capital balances, September 1, 2009 Loans to (from) partner Total Write-off of goodwil Write-off of receivables Loss on sale of inventory Capital balances, September 30, 20X9 Possible loss for remaining receivables and Inventory Possible liquidation on Balandos Distributo any potential deficits Safe payments to partners, September 30, 20X9 Bracken, Louden, and Menser, who share profts and losses in a ratio of 4 3:3, respectively are partners in a home decorating business that has not been able to generate the income the partners had hoped for. They have decided to liquidate the business and have sold all assets except for their decorating equipment. All partnership labilities have been settled and all the partners are personally Insolvent. The decorating equipment has a book value of $63,000, and the partners have capital account balances as follows: Bracken, capital Louden, capital Menser, capital 946,200 5,600 11,200 Required: Determine the amount of cash each partner will receive as a liquidating distribution if the decorating equipment is sold for the amount stated in each of the following independent cases: (Do not round Intermediate calculations.) a. $51,000 Capital Bancos Louden Bracken Monitor Final dintribution of cath b. $42.000 Capital Balance Bracken Loudon Mentor Final distribution of an c. $28,000 Capital Balances Bracken Man Final distribution of cash
