Prior to liquidation, the following information relates to the partnership: Partnership trial balance:

On June 30, other assets with a book value of $160,000 were sold for $120,000, and all available cash with the exception of $20,000 was used to reduce the partnership liabilities. At that time, partners with debit (deficit) capital balances were required to contribute additional capital to whatever extent possible. On July 28, the remaining assets of the partnership were sold for $10,000. Once again, partners with debit (deficit) capital balances were required to contribute additional capital to whatever extent possible. Net personal assets of the partners were as follows:

Required Assuming that the unsatisfied partnership creditors first look to Adams for satisfaction and then to Chenery, determine the amount to be contributed by each partne

r to satisfy the creditors.

Problem 14-9 Event/Circumstance Profit and Loss Percentages Beginning Balances June 30 Sale of assets Balances Contribution of assets payment of liabilities Balances July 28 sale of assets Balances contribution of assets payment of liabilities Balances Adams contribution payment of liabilities Balances Chenery contribution payment of liabilities Balances Allocation of Beyer deficit Balances Allocation of Chenery deficit Balances Allocation of Adams' personal assets: Allocation of Chenery's personal assets: Other Assets Cash Liabilities 0 0 0 0 0 0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0 0 0 0 0 0 0 0 0 Adams Partners' Capital Balances Beyer Chenery 0 0 0 0 0 0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0 0 0 0 0 0 0 0 0 Prior to liquidation, the following information relates to the partnership: Partnership trial balance: On June 30, other assets with a book value of $160,000 were sold for $120,000, and all available cash with the exception of $20,000 was used to reduce the partnership liabilities. At that time, partners with debit (deficit) capital balances were required to contribute additional capital to whatever extent possible. On July 28, the remaining assets of the partnership were sold for $10,000. Once again, partners with debit (deficit) capital balances were required to contribute additional capital to whatever extent possible. Net personal assets of the partners were as follows: Required Assuming that the unsatisfied partnership creditors first look to Adams for satisfaction and then to Chenery, determine the amount to be contributed by each partner to satisfy the creditors. SOLUTION Cash Profit and loss percentages.................... Other Assets Liabilities Partner's Capital Balance Adams Beyer Chenery 30% 30% 40% Beginning balances................................. $ June 30 sale of assets............................ Balances................................................. Contribution of assets............................. Payment of liabilities............................... Balances................................................. 120,000 $ 145,000 6,000 (131,000) $ 20,000 July 28 sale of assets.............................. Balances................................................. $ Contribution of assets............................. Payment of liabilities............................... Balances................................................. Adams contribution................................. Payment of liabilities............................... Balances................................................. Allocation of Beyer deficit (3:4)............... Balances................................................. $ $ 200,000 $ 50,000 $ (10,000) $ 25,000 (160,000) $ 80,000 $ 200,000 (12,000) $ 38,000 (12,000) $(22,000) 6,000 $ (16,000) 9,000 $ 80,000 (131,000) $ 69,000 $ 38,000 $(16,000) $ 9,000 $ 69,000 (21,000) $ 17,000 (21,000) $(37,000) (28,000) $ (19,000) $ (80,000) 12,000 5,000 $ $ $ 3,000 (3,000) $ $ 15,000 $ 17,000 12,000 $(32,000) $ $ 29,000 $(32,000) $ 3,000 $ 29,000 (13,714) $ 15,286 $(32,000) 32,000 $ $ (12,000) $ $ 3,000 $ $ (3,000) $ $ $ 19,000 (54,000) (12,000) Allocation of Chenery deficit................... Balances................................................. 10,000 30,000 $ 240,000 24,000 (54,000) Payment of liabilities............................... Balances................................................. Chenery contribution............................... 25,000 3,000 (18,286) $ (15,286) (15,286) $ $ $ 15,286 $ $ ANSWER CONTINUE TO NEXT PAGE Allocation of Adams' personal assets: Personal liabilities..................................................................... Unsatisfied partnership creditors.............................................. Total claims against personal assets................................... $22,500 15,000 60% 40 10 $37,500 0% Assets to be contributed to partnership (40%$30,000).. $12,000 Allocation of Chenery's personal assets: Personal liabilities..................................................................... Unsatisfied partnership creditors.............................................. $27,000 3,000 90% 10 10 Total claims against personal assets..................................... $30,000 0% Assets to be contributed to partnership (10%$30,000). $3,000