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E 17-3 Liquidation—Cash distribution computation, safe payments scheduleFed, Ela, and Luc have decided to liquidate their partnership. Account balances on January 1, 2016, are as follows:Cash$160,000Accounts payable$60,000Other assets180,000Fed capital (30%)110,000 $340,000Ela capital (30%)50,000  Luc capital (40%)120,000   $340,000The partners agree to keep a $30,000 contingency fund and to distribute available cash immediately.RequiredDetermine the amount of cash that should be paid to each partner.

Question

E 17-3 Liquidation—Cash distribution computation, safe payments schedule

Fed, Ela, and Luc have decided to liquidate their partnership. Account balances on January 1, 2016, are as follows:

Cash

$160,000

Accounts payable

$60,000

Other assets

180,000

Fed capital (30%)

110,000

 

$340,000

Ela capital (30%)

50,000

 

 

Luc capital (40%)

120,000

 

 

 

$340,000

The partners agree to keep a $30,000 contingency fund and to distribute available cash immediately.

Required

Determine the amount of cash that should be paid to each partner.

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Step 1

Liquidation: Liquidation is a process of dissolving the business, realizing the assets, repaying the cr...

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