The partnership of Winn, Xie, Yang, and Zed has the following balance sheet: Cash Other assets $ 40,000 257,000 Liabilities Winn, capital (50% of profits and losses) Xie, capital (30%) Yang, capital (10%) Zed, capital (10%) Zed is personally insolvent, and one of his 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. Beginning capital Assumed loss of Schedule 1 Step one balances Assumed loss of Schedule 2 Step two balances Assumed loss of Schedule 3 Step three balances 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 $25,000. (Do not round intermediate calculations.) $ $ $ Winn 0 $ 0 $ 0 $ Xie 0 $ 0 0 $ $ Yang 0 0 > $ $47,000 70,000 90,000 50,000 40,000 $ 0 $ Zed 0 0 0

The partnership of Winn, Xie, Yang, and Zed has the following balance sheet: Cash Other assets $ 40,000 257,000 Liabilities Winn, capital (50% of profits and losses) Xie, capital (30%) Yang, capital (10%) Zed, capital (10%) Zed is personally insolvent, and one of his 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. Beginning capital Assumed loss of Schedule 1 Step one balances Assumed loss of Schedule 2 Step two balances Assumed loss of Schedule 3 Step three balances 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 $25,000. (Do not round intermediate calculations.) $ $ $ Winn 0 $ 0 $ 0 $ Xie 0 $ 0 0 $ $ Yang 0 0 > $ $47,000 70,000 90,000 50,000 40,000 $ 0 $ Zed 0 0 0

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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