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hree university students, Cho, Kenney, and Martinez, operated a successful business, renting furniture and app raduating and wish to sell the business before beginning their respective careers. They shared profits in a 7:5:4 Cash Receivables oan receivable-Cho Rental equipment, net $6,000 Accounts payable 25,000 Loan payable-Kenney 15,000 | Capital—Cho 140,000 Capital-Kenney Capital-Martinez $60,000 10,000 27,000 28,000 61,000 otal assets $186,000 Total liabilities and capital $186,000 nother student group, organized as a corporation, wants to buy the business. Their offer of $105,000 for the ed aid and the partnership is liquidated. equired ow much does each partner receive?

hree university students, Cho, Kenney, and Martinez, operated a successful business, renting furniture and app raduating and wish to sell the business before beginning their respective careers. They shared profits in a 7:5:4 Cash Receivables oan receivable-Cho Rental equipment, net $6,000 Accounts payable 25,000 Loan payable-Kenney 15,000 | Capital—Cho 140,000 Capital-Kenney Capital-Martinez $60,000 10,000 27,000 28,000 61,000 otal assets $186,000 Total liabilities and capital $186,000 nother student group, organized as a corporation, wants to buy the business. Their offer of $105,000 for the ed aid and the partnership is liquidated. equired ow much does each partner receive?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Lump-Sum Liquidation Three university students, Cho, Kenney, and Martinez, operated a successful business, renting furniture and appliances to students residing in dormitories and off-campus apartments. The three are now graduating and wish to sell the business before beginning their respective careers. They shared profits in a 7:5:4 ratio. The partnership's current balance sheet is as follows: Cash $60,000 10,000 27,000 28,000 Capital-Kenney Capital Martinez 61,000 Total assets $186,000 Total liabilities and capital $186,000 Another student group, organized as a corporation, wants to buy the business. Their offer of $105,000 for the equipment and $12,000 for the receivables is accepted. After receipt of the $117,000, the liabilities are paid and the partnership is liquidated. Required Receivables Loan receivable-Cho Rental equipment, net $6,000 Accounts payable 25,000 Loan payable-Kenney 15,000 | Capital—Cho 140,000 How much does each partner receive? Cash Distribution Cho $ Kenney $ Martinez $ 0 0 0
Transcribed Image Text:Lump-Sum Liquidation Three university students, Cho, Kenney, and Martinez, operated a successful business, renting furniture and appliances to students residing in dormitories and off-campus apartments. The three are now graduating and wish to sell the business before beginning their respective careers. They shared profits in a 7:5:4 ratio. The partnership's current balance sheet is as follows: Cash $60,000 10,000 27,000 28,000 Capital-Kenney Capital Martinez 61,000 Total assets $186,000 Total liabilities and capital $186,000 Another student group, organized as a corporation, wants to buy the business. Their offer of $105,000 for the equipment and $12,000 for the receivables is accepted. After receipt of the $117,000, the liabilities are paid and the partnership is liquidated. Required Receivables Loan receivable-Cho Rental equipment, net $6,000 Accounts payable 25,000 Loan payable-Kenney 15,000 | Capital—Cho 140,000 How much does each partner receive? Cash Distribution Cho $ Kenney $ Martinez $ 0 0 0
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