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 tabs below. Partner Balances Sale of Assets Prepare a predistribution plan to determine the amount for which the partnership must sell the other assets to ensure that Zed receives $10,000 from the liquidation. Liquidation expenses are expected to be $30,000. Winn Xie Yang Zed Beginning capital Assumed loss of Schedule 1 Step one balances S 0 $ ° S 0 $ Assumed loss of Schedule 2 Step two balances $ 0 $ 0 S 0 $ 0 Assumed loss of Schedule 3 Step three balances $ 0 S 0 S 0 $ Partner Balances Sale of Assets >
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 tabs below. Partner Balances Sale of Assets Prepare a predistribution plan to determine the amount for which the partnership must sell the other assets to ensure that Zed receives $10,000 from the liquidation. Liquidation expenses are expected to be $30,000. Winn Xie Yang Zed Beginning capital Assumed loss of Schedule 1 Step one balances S 0 $ ° S 0 $ Assumed loss of Schedule 2 Step two balances $ 0 $ 0 S 0 $ 0 Assumed loss of Schedule 3 Step three balances $ 0 S 0 S 0 $ Partner Balances Sale of Assets >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
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.
Question
Transcribed Image Text: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 tabs below.
Partner
Balances
Sale of Assets
Prepare a predistribution plan to determine the amount for which the partnership must sell the other assets to ensure that
Zed receives $10,000 from the liquidation. Liquidation expenses are expected to be $30,000.
Beginning capital
Winn
Xie
Yang
Zed
Assumed loss of Schedule 1
Step one balances
$
0
$
0
S
0 $
0
Assumed loss of Schedule 2
Step two balances
$
0
S
0 S
0
69
0
Assumed loss of Schedule 3
Step three balances
$
0
$
0 S
0
$
Partner Balances
Sale of Assets >
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