A partnership is considering possible liquidation because one of the partners (Bell) is personally insolvent. Profits and losses are divided on a 4:3:2:1 basis, respectively. Capital balances at the current time are Bell, capital Hardy, capital Dennard, capital Suddath, capital $ 50,000 56,000 14,000 80,000 Bell's creditors have filed a $21,000 claim against the partnership's assets. The partnership currently holds assets of $300,000 and liabilities of $100,000. An independent appraiser indicates that the assets can be sold for $190,000. Required: Prepare a statement of partnership liquidation to determine the amount of cash that Bell would receive from the sale of partnership assets. Note: Amounts to be deducted should be entered with a minus sign. BELL, HARDY, DENNARD, AND SUDDATH PARTNERSHIP Statement of Partnership Liquidation (Hypothetical) Cash Assets Liabilities Bell, Capital Hardy, Capital 40% 30% Dennard, Capital 20% Suddath, Capital 10% Balances Sale of assets Subtotal $ 0 0 0 0 0 0 0 Pay liabilities Subtotal $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Allocate deficit Subtotal 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Distribute cash Ending balances 0 $ 0 0 $ 0 0 $ 0 0
A partnership is considering possible liquidation because one of the partners (Bell) is personally insolvent. Profits and losses are divided on a 4:3:2:1 basis, respectively. Capital balances at the current time are Bell, capital Hardy, capital Dennard, capital Suddath, capital $ 50,000 56,000 14,000 80,000 Bell's creditors have filed a $21,000 claim against the partnership's assets. The partnership currently holds assets of $300,000 and liabilities of $100,000. An independent appraiser indicates that the assets can be sold for $190,000. Required: Prepare a statement of partnership liquidation to determine the amount of cash that Bell would receive from the sale of partnership assets. Note: Amounts to be deducted should be entered with a minus sign. BELL, HARDY, DENNARD, AND SUDDATH PARTNERSHIP Statement of Partnership Liquidation (Hypothetical) Cash Assets Liabilities Bell, Capital Hardy, Capital 40% 30% Dennard, Capital 20% Suddath, Capital 10% Balances Sale of assets Subtotal $ 0 0 0 0 0 0 0 Pay liabilities Subtotal $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Allocate deficit Subtotal 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Distribute cash Ending balances 0 $ 0 0 $ 0 0 $ 0 0
Chapter11: Partnerships: Distributions, Transfer Of Interests, And Terminations
Section: Chapter Questions
Problem 47P
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Transcribed Image Text:A partnership is considering possible liquidation because one of the partners (Bell) is personally insolvent. Profits and losses are
divided on a 4:3:2:1 basis, respectively. Capital balances at the current time are
Bell, capital
Hardy, capital
Dennard, capital
Suddath, capital
$ 50,000
56,000
14,000
80,000
Bell's creditors have filed a $21,000 claim against the partnership's assets. The partnership currently holds assets of $300,000 and
liabilities of $100,000. An independent appraiser indicates that the assets can be sold for $190,000.
Required:
Prepare a statement of partnership liquidation to determine the amount of cash that Bell would receive from the sale of partnership
assets.
Note: Amounts to be deducted should be entered with a minus sign.
BELL, HARDY, DENNARD, AND SUDDATH PARTNERSHIP
Statement of Partnership Liquidation (Hypothetical)
Cash
Assets
Liabilities
Bell, Capital Hardy, Capital
40%
30%
Dennard,
Capital 20%
Suddath,
Capital 10%
Balances
Sale of assets
Subtotal
$
0
0
0
0
0
0
0
Pay liabilities
Subtotal
$
0
$
0 $
0
$
0 $
0
$
0 $
0
Allocate deficit
Subtotal
0
$
0
$
0
$
0
$
0
$
0
$
0
Distribute cash
Ending balances
0
$
0
0
$
0
0
$
0
0
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