Lola, Melvin, and Nettie are in the process of liquidating their partnership. Since it may take several months to convert the other assets into cash, the partners agree to distribute all available cash immediately, except for $12,000 that is set aside for contingent expenses. The balance sheet and residual profit and loss sharing percentages are as follows: Cash $ 500,000 Accounts payable $ 225,000 Other assets 225,000 Lola, capital (20%) 168,000 Melvin, capital (30%) 270,000 ___________ Nettie, capital (50%) 62,000 Total assets $ 725,000 Total liab./equity $ 725,000 Using a safe payments schedule, how much cash should Melvin receive in the first distribution? A. $165,000 B. $202,500 C. $168,600 D. $81,000
Lola, Melvin, and Nettie are in the process of liquidating their
Cash $ 500,000 Accounts payable $ 225,000
Other assets 225,000 Lola, capital (20%) 168,000
Melvin, capital (30%) 270,000
___________ Nettie, capital (50%) 62,000
Total assets $ 725,000 Total liab./equity $ 725,000
Using a safe payments schedule, how much cash should Melvin receive in the first distribution?
| A. |
$165,000 |
|
| B. |
$202,500 |
|
| C. |
$168,600 |
|
| D. |
$81,000 |
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