The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to liquidation: Cash Noncash assets $ 57,000 309,000 Liabilities Drysdale, loan Drysdale, capital (50%) Koufax, capital (30%) Marichal, capital (20%) $ 56,500 35,000 101,500 91,500 81,500 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 $17,000. Prepare a predistribution schedule to guide the distribution of cash. Further, modify the tags in explanation as well. b. Assume that assets costing $95,000 are sold for $70,500. How is the available cash to be divided? Req A1 Req A2 ReqB 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 $ 50 $ Step 1 Drysdale Koufax Marichal Step 2 Koufax Marichal 136,500 91,500 81,500 30 20 % % % $ $ $ 272,900 305,000 407,500 | $ O $ 9,900 60 27,100 40 >> % % $ $ 16,500 67,750 Req A1 Req A2 > Req A1 Req A2 Req B Liquidation expenses are estimated to be $17,000. Prepare a predistribution schedule to guide the distribution of cash. Further, modify the tags in explanation as well. First Next Next DRYSDALE, KOUFAX, AND MARICHAL Distribution of Available Cash $ 73,500 Liabilities $ 56,500 Liquidation 17,000 expenses 20,500 Marichal 100 16,500 Koufax 60 Marichal 40 Drysdale 50 Koufax 30 Marichal 20 % % % All remaining cash % % % Rey A1 Rey M2 Rey D L Assume that assets costing $95,000 are sold for $70,500. 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 $ 57,000 70,500 $127,500 56,500 17,000 $ 54,000 Total Cash distribution to partners: Drysdale Koufax Marichal First $ 20,500 Next $ 9,900 X 6,600 X Next $ 8,500 X 5,100 3,400 Total $ 8,500 $ 15,000 $ 30,500 $ 0