Question

29 to be returned on final exam date. Number 1 The following condensed balance sheet is for the partnership of Hardwick, Saunders, and Ferris, who share profits and losses in the ratio of 4:3:3, respectively: Cash $ 90,000 800,000 Accounts payable Ferris, loan $ 120,000 51,000 Other assets Hardwick, loan 41,000 Hardwick, capital 350,000 Saunders, capital Ferris, capital 210,000 200,000 Total Total liabilities and $ 931,000 $ 931,000 assets capital The partners decide to liquidate the partnership. Fifty percent of the other assets are sold for $200,000. Prepare a proposed schedule of liquidation at this point in time. (Amounts to be deducted should be entered with a minus sign.) Problem 2 The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to liquidation: $ 43,000 Liabilities $45, 500 Cash Noncash 239,000 Drysdale, 1oan 25,000 assets Drysdale, capital (50%) Koufax, capital (30%) Marichal, capital 80,500 70,500 60,500 (208) a. Liquidation expenses are estimated to be $22,000. Prepare a predistribution schedule to guide the distribution of cash. b. Assume that assets costing $81,000 are sold for $63,500. How is the available cash to be divided?

Answer 1

						Hardwick	Saunders	Ferris
			Cash	other	Accounts	loan	capital	loan
				assets	payable	capital		capital
Beginning balances			90,000	800,000	120,000	309,000	210,000	251,000
Sold assets			200,000	-400,000	0	-80,000	-60,000	-60,000
Assumed loss on remaining assets			0	-400,000	0	-160,000	-120,000	-120,000
paid liabilities			-120,000	0	-120,000	0	0	0
Safe balances			170,000	0	0	69,000	30,000	71,000