The Microchip Partnership is liquidating. The balance sheet on the date of liquidation is: Cash $ 50,000 Non cash assets 150,000 Liabilities $90,000 Jeff Capital 50,000 John Capital 50,000 Joe Capital 10,000 Income distribution is Jeff (60%), John (20%) and Joe (20%).

Assume that the partnership is not reimbursed for any partner capital deficit. If non cash assets are sold for $160,000 and the liabilities are paid, how should the remaining cash be distributed? Hint: Liabilities must be paid before the payments to the partners and the payment to the partners is according to the final capital account balances

Jeff = $56,000, John = $52,000, Joe = $12,000

Jeff = $72,000, John = $24,000, Joe = $24,000

Jeff = $126,000, John = $32,000, Joe = $32,000

Jeff = $50,000, John = $50,000, Joe = $10,000

Question 2

2. If non cash assets are sold for $110,000 and the liabilities are paid, how should the remaining cash be distributed?

Jeff = $42,000, John =$14,000, Joe = $14,000

Jeff = $50,000, John =$50,000, Joe = $10,000

Jeff = $96,000, John =$32,000, Joe = $32,000

Jeff = $26,000, John =$42,000, Joe = $2,000

Question 3

3. If non cash assets are sold for $ 80,000 and the liabilities are paid, how should the remaining cash be distributed?

		Jeff =$8,000, John = $36,000, Joe = $4,000
		Jeff =$24,000, John = $8,000, Joe = $8,000
		Jeff =$50,000, John = $50,000, Joe = $10,000
		Jeff =$5,000, John = $35,000, Joe = $ 0.