The following condensed balance sheet is for the partnership of Miller, Tyson, and Watson, who share profits and losses in the ratio of 6:2:2, respectively: Cash $ 63,000 Liabilities $ 53,000 Other assets 160,000 Miller, capital 75,000 Tyson, capital 75,000 Watson, capital 20,000 Total assets $ 223,000 Total liabilities and capital $ 223,000 a. Assuming no liquidation expenses, calculate the safe payments that can be made to partners at this point in time. Miller Tyson Watson Safe payments b. For how much money must the other assets be sold so that each partner receives some amount of cash in a liquidation? other assets must be sold (for an amount less than) or (for an amount o

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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The following condensed balance sheet is for the partnership of Miller, Tyson, and Watson, who share profits and losses in the ratio of 6:2:2, respectively:

 

                 
Cash $ 63,000     Liabilities $ 53,000  
Other assets   160,000     Miller, capital   75,000  
          Tyson, capital   75,000  
          Watson, capital   20,000  
Total assets $ 223,000     Total liabilities and capital $ 223,000  
 

 

a. Assuming no liquidation expenses, calculate the safe payments that can be made to partners at this point in time.

                                Miller               Tyson         Watson

Safe payments   

b. For how much money must the other assets be sold so that each partner receives some amount of cash in a liquidation?

other assets must be sold (for an amount less than) or (for an amount over)

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