Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please answer all parts clearlyIt is now 2 0 3 0 and sadly ( or maybe happily ) Biden, McCarthy, Pelosi and Trump have decided

Please answer all parts clearlyIt is now 2030 and sadly (or maybe happily) Biden, McCarthy, Pelosi and Trump have decided to retire and get out of the septic tank business!
the Balance sheet on January 12030 is as follows:
Cash 100,000 Accounts payable 80000
Accounts receivable 200,000 Note payable 620,000
Equipment 800,000
a/d equipment 200,000 Biden Capital 50,000
Land 900,000 McCarthy Capital 200,000
Pelosi Capital 450,000
total assets 1,800,000 Trump Capital 400,000
Remember, partners share profits equally and losses: Biden 10% McCarthy 25% Pelosi 40% Trump 25%
Because of the decision to dissolve the partnership, partners will NOT receive salary or interest in 2030.
a) On January 1st 2030, what if any safe payments can the partners take?
b) On January 3rd the partnership pays off the accounts payable
On January 4th what if any can the partners take?
c) On January 29th the partnership sells the accounts receivables to the Harris Company for $150,000
On January 30th what if any safe payments can the partners take
d) On February 14th the partnership sells the land to the DeSantis Company for $750,000
On February 15th what if any safe payments can the partners take (assume no one has taken any safe payments so far)
e) On March 2nd the partnership sells the equipment to the Gavin Company for $200,000 and pay off the note payable.
On March 3rd the company dissolves
1) how much does each partner receive if any partner with a negative capital balance is insolvent (nobody has taken any safe payments)
2) how much does each partner pay or receive if any partner with a negative capital balance is solvent and covers their negative balance.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting

Authors: kieso, weygandt and warfield.

IFRS Edition

978-1118443965, 1118800532, 9781118800539, 978-0470873991

More Books

Students also viewed these Accounting questions