Question
The partnership of Butler, Osman, and Ward was formed several years ago as a local tax preparation firm. Two partners have reached retirement age, and
The partnership of Butler, Osman, and Ward was formed several years ago as a local tax preparation firm. Two partners have reached retirement age, and the partners have decided to terminate operations and liquidate the business. Liquidation expenses of $51,000 are expected. The partnership balance sheet at the start of liquidation is as follows:
| Cash | $ | 47,000 | Liabilities | $ | 187,000 | ||
| Accounts receivable | 77,000 | Butler, loan | 47,000 | ||||
| Office equipment (net) | 67,000 | Butler, capital (25%) | 135,000 | ||||
| Building (net) | 195,000 | Osman, capital (25%) | 47,000 | ||||
| Land | 185,000 | Ward, capital (50%) | 155,000 | ||||
| Total assets | $ | 571,000 | Total liabilities and capital | $ | 571,000 | ||
Prepare a predistribution plan for this partnership.
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Auditing A Practical Approach
Authors: Fiona Campbell, Robyn Moroney, Jane Hamilton, Valerie Warren
2nd Canadian edition
9781118377901, 1118377907, 1119048095, 978-1118849415
