Question
Drawdy, Langston, and Pearl operate a local accounting firm as a partnership. After working together for several years, they have decided to liquidate the partnerships
Drawdy, Langston, and Pearl operate a local accounting firm as a partnership. After working together for several years, they have decided to liquidate the partnerships property. The partners have prepared the following balance sheet:
Cash | $ | 35,000 | Liabilities | $ | 45,500 | |
Drawdy, loan | 20,000 | Langston, loan | 25,000 | |||
Noncash assets | 180,000 | Drawdy, capital | 80,000 | |||
Langston, capital | 65,000 | |||||
Pearl, capital | 19,500 | |||||
Total assets | $ | 235,000 | Total liabilities and capital | $ | 235,000 | |
The firm sells the noncash assets for $135,000; it will use $21,000 of this amount to pay liquidation expenses. All three of these partners are personally insolvent. Assume that the profits and losses are split 2:4:4 to Drawdy, Langston, and Pearl, respectively.
Indicate the cash distribution to be made to partners at the end of the liquidation process. Unless otherwise stated, assume that all solvent partners will reimburse the partnership for their deficit capital balances. (Do not round intermediate calculations. Round the final answers to nearest dollar amounts.)
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