E16-6

Olsen, Capital Equipment 140.0 The partners share income 40:40:20, respectively. Assume that 70% of the receivables are collected and that inventory with a book value of $15,000 is sold for $10,000. All cash available at this time is to be distributed. Required: Determine the proper distribution of cash, using the safe payment approach. Partnership Liquidation with Personal Asset Information LoS Pete, Tom, and Zack have operated a laundromat for 10 years. The partners, who share profits 4:3:3, decide to liquidate the partnership. The firm's balance sheet just before the partners sell the other assets for O ENERCISE to-6 respectively $30,000 is as follows Liabilities and Capital Assers Cash s 15,000 110,000 s 42,000 55,000 14,000 Pete, Capital Tom, Capital Zack, Capital Other Assets /24 4:39 PM Page 681 681 The personal status of each partner just before liquidation is as follows Personal Personal Liabilities 00002500 lw 0.00 20g00 50,000 $55,000 30,000 30,000 Pete Tom Zack Lo,000- The partnership operates in a state that has adopted the Uniform Partnership Act. Required: A. Determine the amount of cash each partner will receive in liquidation and how much cash each partner invest in the firm, given their personal positions. B. Determine the amounts that the personal creditors will receive from personal assets and any distribution from the partnership. mast