Sedgwick Company at December 31 has cash $20,000, noncash assets $100,000, liabilities $55,000, and the following capital balances: Floyd $45,000 and DeWitt $20,000. The firm is liquidated, and $105,000 in cash is received for the noncash assets. Floyd and DeWitt income ratios are 60% and 40%, respectively.

Instructions

Prepare a schedule of cash payments.

 

SEDGWICK COMPANY Schedule of Cash Payments Item Cash Noncash Liabilities Floyd, DeWitt, + + Assets Capital Capital Balance before liquidation $20,000 $100,000 $55,000 $45,000 $20,000 Sale of noncash assets and allocation of gain New balances Pay liabilities New balances Cash distribution to partners Final balances