The trial balance for the MAD Partnership is as follows just before declaring bankruptcy.
Question 4 The trial balance for the MAD Partnership is as follows just before declaring bankruptcy. Cash $21,000 Other Assets $99,000 = Liabilities $16,000 Matt Loan $10,000 Matt Capital $44,000 Allen Capital $30,000 Dave Capital $20,000 Partners share profits in the ratio 45:30:25. Prepare a schedule to show how available cash would be distributed to the partners after creditors are paid in full. Loss Absorption Potential Allen Matt Dave TLoss Absorption Potential 44000 -30000 -20000 Distribution to Reduce Loss Potential 10000 Balance after Distribution -10000 T Balance after Distribution 10000 T Balance after Distribution 10000 Assets Distribution Allen Matt Dave -44000 -30000 -20000 State which partner would receive the first cash available and at what point and to what degree each of the remaining partners would participate in cash distributions. Cash Distribution Plan Order of Cash Distribution Liabilities Matt 0.45 Allen 0.3 Dave 0.25 1. First $16,000 100% 010/ 00% 2. Next $9,000 3. Next $15,000 4. Remainder Question 4 The trial balance for the MAD Partnership is as follows just before declaring bankruptcy. Cash $21,000 Other Assets $99,000 = Liabilities $16,000 Matt Loan $10,000 Matt Capital $44,000 Allen Capital $30,000 Dave Capital $20,000 Partners share profits in the ratio 45:30:25. Prepare a schedule to show how available cash would be distributed to the partners after creditors are paid in full. Loss Absorption Potential Allen Matt Dave TLoss Absorption Potential 44000 -30000 -20000 Distribution to Reduce Loss Potential 10000 Balance after Distribution -10000 T Balance after Distribution 10000 T Balance after Distribution 10000 Assets Distribution Allen Matt Dave -44000 -30000 -20000 State which partner would receive the first cash available and at what point and to what degree each of the remaining partners would participate in cash distributions. Cash Distribution Plan Order of Cash Distribution Liabilities Matt 0.45 Allen 0.3 Dave 0.25 1. First $16,000 100% 010/ 00% 2. Next $9,000 3. Next $15,000 4. Remainder
