The partnership of Winn, Xie, Yang, and Zed has the following balance sheet:CashOther assets$ 31,000221,000Liabilities$ 41,000Winn, capital (50% of profits and losses)Xie, capital (308)Yang, capital (10%)Zed, capital (10%)61,00078,00041,00031,000Zed is personally insolvent, and one of his creditors is considering suing the partnership for the $6,000 that is currently owed. Thecreditor realizes that this litigation could result in partnership liquidation and does not wish to force such an extreme action unless Zedis reasonably sure of obtaining at least $6,000 from the liquidation.Determine the amount for which the partnership must sell the other assets to ensure that Zed receives $6,000 from the liquidation?Liquidation expenses are expected to be $16,000. (Do not round intermediate calculations.)Answer is complete but not entirely correct.Minimumamount$(30,000)

Step 1:Required funds to pay off liabilities= Liabilities + Liquidation expenses= $41,000 + $16,000=…

Answered: The partnership of Winn, Xie, Yang, and…

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…
The partnership of Winn, Xie, Yang, and Zed has the following balance sheet: Cash Other assets $ 46,000 285,000 Liabilities $ 57,000 Winn, capital (50% of profits and losses) Xie, capital (30%) 76,000 96,000 Yang, capital (10%) Zed, capital (10%) 56,000 46,000 Zed is personally insolvent, and one of Zed's creditors is considering suing the partnership for the $3,000 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 $3,000 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 $3,000 from the liquidation. Liquidation expenses are expected to be $31,000. b. For how much must the partnership sell the other assets to ensure that Zed receives $3,000 from the liquidation? Complete this question by entering your answers in…
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