Prepare a predistribution plan to determine the amount for which the partnership must sell the other assets to ensure that Zed receives $4,000 from the liquidation. Liquidation expenses are expected to be $29,000.(Do not round intermediate calculations.)
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
The
| Cash | $ | 44,000 | Liabilities | $ | 53,000 |
| Other assets | 283,000 | Winn, capital (50% of |
74,000 | ||
| Xie, capital (30%) | 102,000 | ||||
| Yang, capital (10%) | 54,000 | ||||
| Zed, capital (10%) | 44,000 | ||||
Zed is personally insolvent, and one of his creditors is considering suing the partnership for the $4,000 that is currently owed. The creditor realizes that this litigation could result in partnership liquidation and does not wish to force such an extreme action unless Zed is reasonably sure of obtaining at least $4,000 from the liquidation.
Prepare a predistribution plan to determine the amount for which the partnership must sell the other assets to ensure that Zed receives $4,000 from the liquidation. Liquidation expenses are expected to be $29,000.(Do not round intermediate calculations.)
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