Question
Following is a series of independent cases . In each situation, indicate the cash distribution to be made to partners at the end of the
Following is a series of independent cases. In each situation, 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.
Part A
The Buarque, Monte, and Vinicius partnership reports the following accounts. Vinicius is personally insolvent and can contribute only an additional $14,000 to the partnership.
| Cash | $ | 135,000 | |
| Liabilities | 40,000 | ||
| Monte, loan | 30,000 | ||
| Buarque, capital (50% of profits and losses) | 40,000 | ||
| Monte, capital (25%) | 45,000 | ||
| Vinicius, capital (25%) | (20,000 | ) (deficit) | |
Part B
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 | $ | 25,000 | Liabilities | $ | 39,500 | |
| Drawdy, loan | 10,000 | Langston, loan | 16,000 | |||
| Noncash assets | 160,000 | Drawdy, capital (40%) | 70,000 | |||
| Langston, capital (30%) | 55,000 | |||||
| Pearl, capital (30%) | 14,500 | |||||
| Total assets | $ | 195,000 | Total liabilities and capital | $ | 195,000 | |
The firm sells the noncash assets for $125,000; it will use $20,000 of this amount to pay liquidation expenses. All three of these partners are personally insolvent.
Part C
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 | $ | 25,000 | Liabilities | $ | 39,500 | |
| Drawdy, loan | 10,000 | Langston, loan | 16,000 | |||
| Noncash assets | 160,000 | Drawdy, capital | 70,000 | |||
| Langston, capital | 55,000 | |||||
| Pearl, capital | 14,500 | |||||
| Total assets | $ | 195,000 | Total liabilities and capital | $ | 195,000 | |
The firm sells the noncash assets for $125,000; it will use $11,000 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.
Part D
Following the liquidation of all noncash assets, the partnership of Krups, Lindau, Riedel, and Schnee has the following account balances. Krups is personally insolvent.
| Liabilities | $ | 9,000 | |
| Krups, loan | 11,000 | ||
| Krups, capital (30% of profits and losses) | (30,000 | ) deficit | |
| Lindau, capital (30%) | (35,000 | ) deficit | |
| Riedel, capital (20%) | 20,000 | ||
| Schnee, capital (20%) | 25,000 | ||
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.
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ndicate 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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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.)
|
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 answer to nearest dollar amounts.)
|
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Information Technology Auditing
Authors: James A. Hall
4th edition
1133949886, 978-1305445154, 1305445155, 978-1133949886
