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?

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?

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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Question

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 the tabs below.
Partner
Balances
Sale of Assets
For how much must the partnership sell the other assets to ensure that Zed receives $3,000 from the liquidation?
For how much must the partnership sell the other assets to ensure that Zed receives $3000 from the liquidation?
$
76,000
Partner Balances
Sale of Assets

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Step 1: Definition of partnership

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