The following balance sheet is for a local partnership in which the partners have become very unhappy with each other. $ 48,000 170,000 160,000 $ 38,000 106,000 42,000 76,000 Cash Liabilities Land Adams, capital Baker, capital Building Carvil, capital Dobbs, capital 116,000 $ 378,000 Total liabilities and capital $ 378,000 Total assets To avoid more conflict, the partners have decided to cease operations and sell all assets. Using this information, answer the following questions. Each question should be viewed as an independent situation related to the partnership's liquidation. a. The $10,000 cash that exceeds the partnership liabilities is to be disbursed immediately. If profits and losses are allocated to Adams, Baker, Carvil, and Dobbs on a 2:3:3:2 basis, respectively, how will the $10,000 be divided? b. The $10,000 cash that exceeds the partnership liabilities is to be disbursed immediately. If profits and losses are allocated on a 2:2:3:3 basis, respectively, how will the $10,000 be divided? c. The building is immediately sold for $90,000 to give total cash of $138,000. The liabilities are then paid, leaving a cash balance of $100,000. This cash is to be distributed to the partners. How much of this money will each partner receive if profits and losses are allocated to Adams, Baker, Carvil, and Dobbs on a 1:3:3:3 basis, respectively? (Do not round intermediate calculations.) d. Assume that profits and losses are allocated to Adams, Baker, Carvil, and Dobbs on a 1:3:4:2 basis, respectively. How much money must the firm receive from selling the land and building to ensure that Carvil receives a portion? (Do not round intermediate calculations.)
The following balance sheet is for a local partnership in which the partners have become very unhappy with each other. $ 48,000 170,000 160,000 $ 38,000 106,000 42,000 76,000 Cash Liabilities Land Adams, capital Baker, capital Building Carvil, capital Dobbs, capital 116,000 $ 378,000 Total liabilities and capital $ 378,000 Total assets To avoid more conflict, the partners have decided to cease operations and sell all assets. Using this information, answer the following questions. Each question should be viewed as an independent situation related to the partnership's liquidation. a. The $10,000 cash that exceeds the partnership liabilities is to be disbursed immediately. If profits and losses are allocated to Adams, Baker, Carvil, and Dobbs on a 2:3:3:2 basis, respectively, how will the $10,000 be divided? b. The $10,000 cash that exceeds the partnership liabilities is to be disbursed immediately. If profits and losses are allocated on a 2:2:3:3 basis, respectively, how will the $10,000 be divided? c. The building is immediately sold for $90,000 to give total cash of $138,000. The liabilities are then paid, leaving a cash balance of $100,000. This cash is to be distributed to the partners. How much of this money will each partner receive if profits and losses are allocated to Adams, Baker, Carvil, and Dobbs on a 1:3:3:3 basis, respectively? (Do not round intermediate calculations.) d. Assume that profits and losses are allocated to Adams, Baker, Carvil, and Dobbs on a 1:3:4:2 basis, respectively. How much money must the firm receive from selling the land and building to ensure that Carvil receives a portion? (Do not round intermediate calculations.)
Chapter21: Partnerships
Section: Chapter Questions
Problem 65P
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Transcribed Image Text:The following balance sheet is for a local partnership in which the partners have become very unhappy with each other.
$ 48,000
170,000
160,000
$ 38,000
106,000
42,000
76,000
Cash
Liabilities
Land
Adams, capital
Baker, capital
Building
Carvil, capital
Dobbs, capital
116,000
$ 378,000
Total liabilities and capital
$ 378,000
Total assets
To avoid more conflict, the partners have decided to cease operations and sell all assets. Using this information, answer the following
questions. Each question should be viewed as an independent situation related to the partnership's liquidation.
a. The $10,000 cash that exceeds the partnership liabilities is to be disbursed immediately. If profits and losses are allocated to
Adams, Baker, Carvil, and Dobbs on a 2:3:3:2 basis, respectively, how will the $10,000 be divided?
b. The $10,000 cash that exceeds the partnership liabilities is to be disbursed immediately. If profits and losses are allocated on a
2:2:3:3 basis, respectively, how will the $10,000 be divided?
c. The building is immediately sold for $90,000 to give total cash of $138,000. The liabilities are then paid, leaving a cash balance of
$100,000. This cash is to be distributed to the partners. How much of this money will each partner receive if profits and losses are
allocated to Adams, Baker, Carvil, and Dobbs on a 1:3:3:3 basis, respectively? (Do not round intermediate calculations.)
d. Assume that profits and losses are allocated to Adams, Baker, Carvil, and Dobbs on a 1:3:4:2 basis, respectively. How much money
must the firm receive from selling the land and building to ensure that Carvil receives a portion? (Do not round intermediate
calculations.)
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