The partnership of Ramos, Rios, Safar, and Wong is being liquidated. It currently holds cash of $20,300 but no other assets. Liabilities amount to $22,600. The capital balances are Ramos (40% of profits and losses) Rios (30%) Safar (10%) Wong (20%) Required: a. If both Safar and Wong are personally insolvent, how much money must Rios contribute to the partnership? b-1. If only Wong is personally insolvent, how much money must Safar contribute to the partnership? b-2. If only Wong is personally insolvent, how will Safar's contribution (funds) be distributed? c. If only Safar is personally insolvent, how much money should Ramos receive from the liquidation? ote: For all requirements, do not round intermediate calculations. Round your answers to the nearest whole dollar amount. -1 2 2. 2. Rio's contribution Safar contribution Creditors, Ramos $ 23,700 16,000 (18,000) (deficit) (24,000) (deficit) Rios Ramos should receive

The partnership of Ramos, Rios, Safar, and Wong is being liquidated. It currently holds cash of $20,300 but no other assets. Liabilities amount to $22,600. The capital balances are Ramos (40% of profits and losses) Rios (30%) Safar (10%) Wong (20%) Required: a. If both Safar and Wong are personally insolvent, how much money must Rios contribute to the partnership? b-1. If only Wong is personally insolvent, how much money must Safar contribute to the partnership? b-2. If only Wong is personally insolvent, how will Safar's contribution (funds) be distributed? c. If only Safar is personally insolvent, how much money should Ramos receive from the liquidation? ote: For all requirements, do not round intermediate calculations. Round your answers to the nearest whole dollar amount. -1 2 2. 2. Rio's contribution Safar contribution Creditors, Ramos $ 23,700 16,000 (18,000) (deficit) (24,000) (deficit) Rios Ramos should receive

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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The partnership of Winn, Xie, Yang, and Zed has the following balance sheet: Cash Other assets $ 39,000 256,000 Liabilities $ 51,000 Winn, capital (50% of profits and losses) Xie, capital (38%) 69,000 87,000 Yang, capital (10%) zed, capital (18%) 49,000 39,000 Zed is personally insolvent, and one of Zed's creditors is considering suing the partnership for the $5,000 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 $5,000 from the liquidation. Required: a. Prepare a predistribution plan to determine the amount for which the partnership must sell the other assets to ensure that Zed receives $5,000 from the liquidation. Liquidation expenses are expected to be $24,000. b. For how much must the partnership sell the other assets to ensure that Zed receives $5,000 from the liquidation? Complete this question by entering your answers in…
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