Q. 6. (A) A partnership is considering the possibility of liquidation because one of the partners, Stewart, is insolvent. Capital balances at the current time are as follows, and profits and losses are divided on a 6:3:1 basis, respectively.

George, Capital Rs. 70,000

Stewart, Capital 50,000

Thomas, Capital 80,000

Stewarts creditors have filed a Rs. 60,000 claim against the partnerships assets. The partnership currently holds assets reported at Rs. 300,000 and liabilities of Rs. 100,000. If the assets can be sold for Rs. 150,000, what is the minimum amount that Stewarts creditors would receive?

(B) The following condensed balance sheet is for the partnership of Andrews, Carroll, and Murray, who share profits and losses in the ratio of 6:2:2, respectively.

Cash Rs. 70,000

Other assets 130,000

Total assets Rs. 200,000

Liabilities Rs. 160,000

Andrews, Capital 25,000

Carroll, Capital 10,000

Murray, Capital 5,000

Total liabilities and partners equity Rs. 200,000

Which partner is most vulnerable to a loss?

(c) The CDE partnership is being liquidated. After all liabilities have been paid and all assets sold, the balances of the partners capital accounts are as follows: Ahmad, Rs. 42,000 credit balance; Jawad, Rs. 16,000 debit balance; Ali, Rs. 53,000 credit balance. The partners share profits and losses: Ahmad 10%; Jawad, 60%; Ali, 30%. (a) How should the available cash (the only remaining asset) be distributed if it is impossible to determine at this date whether Jawad will be able to pay Rs. 16,000 he owes to the firm? Draft the journal entry to record payment of all available cash at this time. (b) Draft the journal entries to record a subsequent partial payment of Rs. 13,000 to the firm by Jawad, and the distribution of this cash. Prepare a schedule (similar to the one prepared in part a) showing computation of amount to be distributed to each partner.