Question
Several years ago, Ann Dennis, Jill Edwards, Lee Lacy, and Sarah Ingram formed a partnership to operate the Deli Sisters Cafe. Rerouting of bus lines
Several years ago, Ann Dennis, Jill Edwards, Lee Lacy, and Sarah Ingram formed a partnership to operate the Deli Sisters Cafe. Rerouting of bus lines caused declines in patronage to the extent that the partners have agreed to dissolve the partnership and liquidate the assets. The November 2, 2017, balance sheet of the Deli Sisters Cafe and other data appear below. The partnership agreement did not specify how profits and losses were to be shared.
DELI SISTERS CAF
Balance Sheet
November 2, 2017 Cash $30,000
Liabilities $50,100 Supplies 15,000
Loan-Ingram 20,000 Equipment 150,000
Capital-Dennis 52,000 Fixtures 40,000
Capital-Edwards 45,000
Capital-Lacy 19,900
Capital-Ingram 48,000 Total assets $235,000
Total liabilities and capital $235,000
Additonal information:
- During November, sold half of the fixtures for $5,000. Sold equipment with a book value of $30,000 for $22,000.
- During December, paid all outside creditors. A neighboring restaurant bought Deli Sisters Cafe's supplies at 80 percent of cost. Sold the remaining fixtures for $8,000.
- During January, sold equipment with a book value of $40,000 for $28,000.
Following the safe payment approach, specify how cash is to be distributed at the end of November, December, and January.
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