Question
The partnership of Anderson, Berry, Hammond, and Winwood is being liquidated. It currently holds cash of $22,000 but no other assets. Liabilities amount to $32,800.
The partnership of Anderson, Berry, Hammond, and Winwood is being liquidated. It currently holds cash of $22,000 but no other assets. Liabilities amount to $32,800. The capital balances are
| Anderson (30% of profits and losses) | $ | 26,200 | ||
| Berry (30%) | 29,000 | |||
| Hammond (20%) | (24,000 | ) | (deficit) | |
| Winwood (20%) | (42,000 | ) | (deficit) | |
a. If both Hammond and Winwood are personally insolvent, how much money must Berry contribute to this partnership?
b-1. If only Winwood is personally insolvent, how much money must Hammond contribute?
b-2. If only Winwood is personally insolvent, how will Hammond's contribution (funds) be disbursed?
c. If only Hammond is personally insolvent, how much money should Anderson receive from the liquidation?
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Introduction To Managerial Accounting
Authors: Peter Brewer, Ray Garrison, Eric Noreen
3rd Edition
0073048836, 9780073048833
