The partners of Jones, Davis & Harris LLP decided to liquidate on October 1, 2020. The balance sheet of the partnership is as follows, with the profit and loss ratio of 30%, 30%, and 40%, respectively. Assets Liabilities and Capital bal. Cash $ 103,000 Accounts payable $ 138,000 Accounts receivable 197,000 Loan-Harris 47,000 Loan-Davis 82,000 Jones, capital 145,000 Machinery 218,000 Davis, capital 174,000 Harris, capital 96,000 Total $ 600,000 Total $ 600,000 During October, $115,000 of accounts receivable was collected and the remainder is deemed uncollectible. A total of $106,000 was paid to accounts payable, after receiving a $32,000 credit memo from a creditor. $4,500 of liquidation expense was paid in October. The partnership estimate that future liquidation expense will amount to $ 35,000 Requirements: (1) What are the capital balances of each partner after considering their loans from/to the partnership (i.e., the capital balances right after loan adjustments)? (3 points; one point each) Answer: Jones: A/ Davis: Harris: Davis: Harris: A/ (2) Calculate the amount of actual loss and potential loss. (5 points: 2.5 points each) Answer Actual loss: A/ Potential loss: (3) Regardless of your previous answers, assume that after loan adjustments and allocation of actual and potential losses, the following capital balances are reported. Note that Davis has a deficit. Harris (40%) Jones (30%) $ 48,000 Davis (30%) $14,000) $ 14,000 Capital balances (after loan adj. and actual and potential loss) Complete the last step of calculation and determine the safe cash payment to each partner. Round your answers to the nearest dollars when needed. (4.5 points. 1.5 points each) Answer: Cash to Jones: Davis: AM Harris A Previous Page Next Pa Page 22 of 22