The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to liquidation: Cash Noncash assets $ 45,000 249,000 Liabilities Drysdale, loan Drysdale, capital (50%) Koufax, capital (30%) Marichal, capital (20%) $ 43,500 30,000 83,500 73,500 63,500 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 $24,000. Prepare a predistribution schedule to guide the distribution of cash. Further, modify the tags in explanation as well. b. Assume that assets costing $83,000 are sold for $64,500. How is the available cash to be divided? Req A1 Req 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 Step 1 Drysdale Koufax % % Marichal % Step 2 Koufax % Marichal % Reg A1 Reg A2 Req B Liquidation expenses are estimated to be $24,000. Prepare a predistribution schedule to guide the distribution of cash. Further, modify the tags in explanation as well. DRYSDALE, KOUFAX, AND MARICHAL Distribution of Available Cash Liabilities First Liquidation expenses Next % Next % % All remaining cash % % % . Assume that assets costing $83,000 are sold for $64,500. How is the available cash to be divided? Cash available for distribution: Beginning cash balance Sale of noncash assets Subtotal Payment of liabilities Payment of estimated liquidation expenses Cash available for distribution Cash distribution to partners: Drysdale First Koufax Marichal Total Next Next Total Reg A1 Reg A2 Req B Liquidation expenses are estimated to be $24,000. Prepare a predistribution schedule to guide the distribution of cash. Further, modify the tags in explanation as well. DRYSDALE, KOUFAX, AND MARICHAL Distribution of Available Cash Liabilities First Liquidation expenses Next % Next % % All remaining cash % % % . Assume that assets costing $83,000 are sold for $64,500. How is the available cash to be divided? Cash available for distribution: Beginning cash balance Sale of noncash assets Subtotal Payment of liabilities Payment of estimated liquidation expenses Cash available for distribution Cash distribution to partners: Drysdale First Koufax Marichal Total Next Next Total
