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ump-Sum Liquidation hree university students, Cho, Kenney, and Martinez, operated a successful business, re raduating and wish to sell the business before beginning their respective careers. They Cash Receivables Loan receivable-Cho Rental equipment, net $6,000 Accounts payable 25,000 Loan payable-Kenney 15,000 | Capital-Cho 140,000 $60,000 10,000 27,000 Capital-Kenney 28,000 Capital-Martinez 61,000 Total assets $186,000 Total liabilities and capital $186,000 mother student group, organized as a corporation, wants to buy the business. Their offe aid and the partnership is liquidated. nquired

ump-Sum Liquidation hree university students, Cho, Kenney, and Martinez, operated a successful business, re raduating and wish to sell the business before beginning their respective careers. They Cash Receivables Loan receivable-Cho Rental equipment, net $6,000 Accounts payable 25,000 Loan payable-Kenney 15,000 | Capital-Cho 140,000 $60,000 10,000 27,000 Capital-Kenney 28,000 Capital-Martinez 61,000 Total assets $186,000 Total liabilities and capital $186,000 mother student group, organized as a corporation, wants to buy the business. Their offe aid and the partnership is liquidated. nquired

FINANCIAL ACCOUNTING
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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Lump-Sum Liquidation Three university students, Cho, Kenney, and Martinez, operated a successful business, renting furniture and appliances to students residing in dormitories and off-campus apartments. The three are now graduating and wish to sell the business before beginning their respective careers. They shared profits in a 7.5.4 ratio The partnership's current balance sheet is as follows: Cash $6,000 Accounts payable $60,000 10,000 25,000 Loan payable-Kenney 15,000 Capital—Cho 27,000 28,000 140,000 Capital-Kenney Capital-Martinez 61,000 Total assets $186,000 Total liabilities and capital $186,000 Another student group, organized as a corporation, wants to buy the business. Their offer of $105,000 for the equipment and $12,000 for the receivables is accepted. After receipt of the $117,000, the liabilities are paid and the partnership is liquidated. Required How much does each partner receive? Cash Distribution Cho $ 9,000 Kenney $ 23,000 Martinez $ 49,000 Receivables Loan receivable-Cho Rental equipment, net
Transcribed Image Text:Lump-Sum Liquidation Three university students, Cho, Kenney, and Martinez, operated a successful business, renting furniture and appliances to students residing in dormitories and off-campus apartments. The three are now graduating and wish to sell the business before beginning their respective careers. They shared profits in a 7.5.4 ratio The partnership's current balance sheet is as follows: Cash $6,000 Accounts payable $60,000 10,000 25,000 Loan payable-Kenney 15,000 Capital—Cho 27,000 28,000 140,000 Capital-Kenney Capital-Martinez 61,000 Total assets $186,000 Total liabilities and capital $186,000 Another student group, organized as a corporation, wants to buy the business. Their offer of $105,000 for the equipment and $12,000 for the receivables is accepted. After receipt of the $117,000, the liabilities are paid and the partnership is liquidated. Required How much does each partner receive? Cash Distribution Cho $ 9,000 Kenney $ 23,000 Martinez $ 49,000 Receivables Loan receivable-Cho Rental equipment, net
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