Q.07

The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to liquidation: Cash Noncash assets $ 52,000 284,000 Liabilities Drysdale, loan Drysdale, capital (508) Koufax, capital (308) Marichal, capital (20) $ 59,000 25,000 94,000 84,000 74,000 a-1. Determine the maximum loss that can be absorbed in Step 1. Then, assuming that this loss has been incurred, determine the next maximum loss that can be absorbed in Step 2. a-2. Liquidation expenses are estimated to be $12,000. Prepare a predistribution schedule to guide the distribution of cash. Further, modify the tags in explanation as well. b. Assume that assets costing $90,000 are sold for $68.000. How is the available cash to be divided? Answer is not complete. Complete this question by entering your answers in the tabs below. Reg A1 Reg AZ Reg B Determine the maximum loss that can be absorbed in Step 1. Then, assuming that this loss has been incurred, determine the next maximum loss that can be absorbed in Step 2. Maximum Capital Loss Partner Loss That Balance Allocation Can Be Absorbed Step 1 b. Assume that assets costing $90,000 are sold for $68,000. How is the available cash to be divided? Answer is not complete. Complete this question by entering your answers in the tabs below. Reg A1 Reg A2 Reg B Determine the maximum loss that can be absorbed in Step 1. Then, assuming that this loss has been incurred, determine the next maximum loss that can be absorbed in Step 2. Partner Capital Balance Loss Allocation Maximum Loss That Can Be Absorbed s Step 1 Drysdale Koufax Marichal Step 2 Koufax Marichal $ $ 119,000 84,000 74,000 >IS 50 % 30 % 20 % DO $ $ $ 238,000 280,000 370,000 $ $ $ 12,600 26,400 60 40 % % 21,000 66,000 CHANA Reg A2 > b. Assume that assets costing $90,000 are sold for $68,000. How is the available cash to be divided? Answer is not complete. Complete this question by entering your answers in the tabs below. Req Al Reg A2 Reg B Liquidation expenses are estimated to be $12,000. Prepare a predistribution schedule to guide the distribution of cash. Further, modify the tags in explanation as well First Next DRYSDALE, KOUFAX, AND MARICHAL Distribution of Available Cash $ 71,000 Liabilities $ 59,000 Liquidation 12,000 expenses 18,000 Marichal 100 % 21,000 Koufax 00 % Marichal 40 % 0 Drysdale 50 % Koufax 30 % Marichal 20% Next All remaining cash b. Assume that assets costing $90,000 are sold for $68,000. How is the available cash to be divided? Answer is not complete. Complete this question by entering your answers in the tabs below. Reg A1 Reg A2 ReqB Assume that assets costing $90,000 are sold for $68,000. How is the available cash to be divided? Cash available for distribution: Beginning cash balance Sale of noncash assets Subtotal Payment of fiabilities Payment of estimated liquidation expenses Cash available for distribution $ 52,000 68,000 $120,000 59,000 12,000 $ 49,000 > Marichal Cash distribution to partners: Drysdale Koufax First $ 18,000 Next 21.000 3 Next $ 10,000 5,000 Total $ 49,000 $5,000 12,600 3,000 $ 15,600 Total $ 18,000 8,400 3 2,000 $ 28,400