The following information is available:

SMITH AND CO.

BALANCE SHEET

as at July 1, Year 4

Cash $ 18,000

Receivables 39,000

Inventory 80,000

Fixed assets, net 410,000

$547,000

Current liabilities $ 47,000

Note payable to Smith 40,000

Smith, capital 110,000

Taylor, capital 160,000

White, capital 190,000

$547,000

The partners share the profits, 50%, 30%, 20% to Smith, Taylor, White. The partners

have decided to wind up their company, and as the accountant you must conduct

the liquidation. The cash must be paid out as soon as it is received because of animosity

among the partners.

You proceed to liquidate the assets and receive cash in the following manner:

Dates Cash received Book value of assets*

July 15, Year 4 $ 7,000 $ 9,000 Receivables

31,000 40,000 Inventory

July 25, Year 4 $11,000 $ 15,000 Receivables

24,000 40,000 Inventory

July 30, Year 4 $ 8,000 $ 15,000 Receivables

86,000 100,000 Fixed assets

* Sold to generate cash.

You now have $310,000 of fixed assets remaining, at book value, to dispose of, but

you cannot determine what amount of cash these will generate.

Required:

Prepare a schedule of partnership liquidation that clearly shows how the cash would be

paid out (i.e., to whom and how much):

(a) on July 15, Year 4.

(b) on July 25, Year 4.

(c) on July 30, Year 4