Partners Dennis and Lilly have decided to liquidate their business. The following information is available:

Cash	$100,000	Accounts Payable	$100,000
Inventory	$200,000	Dennis, Capital	$120,000
		Lilly, Capital	$80,000
	$300,000		$300,000

Dennis and Lilly share profits and losses in a 3:2 ratio. During the first month of liquidation, half the inventory is sold for $60,000, and $60,000 of the accounts payable is paid. During the second month, the rest of the inventory is sold for $45,000, and the remaining accounts payable are paid. Cash is distributed at the end of each month, and the liquidation is completed at the end of the second month.

10.

Required information

Refer to the information provided above. Using a safe payments schedule, how much cash will be distributed to Dennis at the end of the first month?

$36,000

$64,000

$60,000

$24,000

11.

Required information

Refer to the information provided above. Using a safe payments schedule, how much cash will be distributed to Lilly at the end of the first month?

$40,000

$24,000

$64,000

$16,000

12.

Required information

Refer to the information provided above. Using a safe payments schedule, how much cash will be distributed to Dennis at the end of the second month?

$27,000

$36,000

$18,000

$60,000

13.

Required information

Refer to the information provided above. Using a safe payments schedule, how much cash will be distributed to Lilly at the end of the second month?

$18,000

$27,000

$0

$36,000

14.

Required information

Refer to the information provided. Assume instead that the remaining inventory was sold for $10,000 in the second month. What payments will be made to Dennis and Lilly at the end of the second month?

	Dennis	Lilly
A)	$0	$0
B)	$10,000	$0
C)	$5,000	$5,000
D)	$6,000	$4,000

Option B

Option C

Option D

Option A