Lump-sum liquidations: liquidation of partnership in which all assets are converted into cash within a short time, creditors are paid, and a single lump-sum payment is made to the partners for their capital interests. Partnership may experiences losses on disposal of assets, because it has to make offer below the normal selling price to encourage immediate sales. The partnership attempts to collect receivable has to offer large cash discounts for prompt payments. Any goodwill on the partnership books is generally written off when the partnership begins liquidation because it is no longer a going concern. In some situations a deficit may occur in a partner’s capital account if its credit balance is too low to absorb share of losses, such deficit may be cleared by either partner investing cash or other asset or the partner’s capital deficit is distributed to the other partners in their resulting loss sharing ratio. The amount of cash each partner will receive as liquidating distribution when equipment is sold for the amount stated in each of the following cases.

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Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement 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, and drawings of a partner.

Chapter 16, Problem 16.3E

To determine

Lump-sum liquidations: liquidation of partnership in which all assets are converted into cash within a short time, creditors are paid, and a single lump-sum payment is made to the partners for their capital interests. Partnership may experiences losses on disposal of assets, because it has to make offer below the normal selling price to encourage immediate sales. The partnership attempts to collect receivable has to offer large cash discounts for prompt payments. Any goodwill on the partnership books is generally written off when the partnership begins liquidation because it is no longer a going concern.

In some situations a deficit may occur in a partner’s capital account if its credit balance is too low to absorb share of losses, such deficit may be cleared by either partner investing cash or other asset or the partner’s capital deficit is distributed to the other partners in their resulting loss sharing ratio.

The amount of cash each partner will receive as liquidating distribution when equipment is sold for the amount stated in each of the following cases.

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Please help me answer this question. Tom, Dani, and Harry are partners in an equipment leasing business that has not been able to generate the type of revenue expected by the partners. They share profits and losses in a ratio of 5:3:2. They have decided to liquidate the business and have sold all the assets except for one piece of heavy machinery. All partnership liabilities have been settled, and all the partners are personally insolvent. The machinery has a book value of $65,000, and the partners have capital account balances as follows: Tom, Capital $ 40,000 Dick, Capital 10,000 Harry, Capital 15,000 Each of the following is an independent case. Refer to the information given above. What amount of cash will each partner receive as a liquidating distribution if the machinery is sold for $1,100? Tom Dani Harry A) $ 1,100 $ 0 $ 0 B) $ 8,050 $ 9,170 $ 2,220 C) $ 1,500 $ 0 $ 400 D) $ 1,500 $ 0 $ 0

Adams, Peters, and Blake share profits and losses for their APB Partnership in a ratio of 2:3:5. When they decide to liquidate, the balance sheet is as follows: Cash Adams, Loan: Other Assets Assets Total Assets Liabilities Adams, Capital Peters, Capital Blake, Capital Total Liabilities and Equities Liquidation expenses are expected to be negligible. No interest accrues on loans with partners after termination of the business. Required: Prepare a cash distribution plan for the APB Partnership. Please follow the practical guidelines when completing this worksheet. Profit and loss percentages Preliquidation capital balances Loan to Adams Total Loss absorption potential Decrease highest LAP to next highest Adams $ 51,000 12,200 222,000 $285,200 Decrease LAPs to next highest Adams Peters ✪ 00 Adams Loss Absorption Potential Peters 335,500 (30.500) $ 305,000 O (142,400) O $ 162.600 Answer is not complete. APB PARTNERSHIP Cash Distribution Plan Liabilities and Capital 305,000 $ 305,000…

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Answer 2

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Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement 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, and drawings of a partner.

Chapter 16, Problem 16.3E

To determine

Lump-sum liquidations: liquidation of partnership in which all assets are converted into cash within a short time, creditors are paid, and a single lump-sum payment is made to the partners for their capital interests. Partnership may experiences losses on disposal of assets, because it has to make offer below the normal selling price to encourage immediate sales. The partnership attempts to collect receivable has to offer large cash discounts for prompt payments. Any goodwill on the partnership books is generally written off when the partnership begins liquidation because it is no longer a going concern.

In some situations a deficit may occur in a partner’s capital account if its credit balance is too low to absorb share of losses, such deficit may be cleared by either partner investing cash or other asset or the partner’s capital deficit is distributed to the other partners in their resulting loss sharing ratio.

The amount of cash each partner will receive as liquidating distribution when equipment is sold for the amount stated in each of the following cases.

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Answer 3

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Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement 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, and drawings of a partner.

Chapter 16, Problem 16.3E

To determine

Lump-sum liquidations: liquidation of partnership in which all assets are converted into cash within a short time, creditors are paid, and a single lump-sum payment is made to the partners for their capital interests. Partnership may experiences losses on disposal of assets, because it has to make offer below the normal selling price to encourage immediate sales. The partnership attempts to collect receivable has to offer large cash discounts for prompt payments. Any goodwill on the partnership books is generally written off when the partnership begins liquidation because it is no longer a going concern.

In some situations a deficit may occur in a partner’s capital account if its credit balance is too low to absorb share of losses, such deficit may be cleared by either partner investing cash or other asset or the partner’s capital deficit is distributed to the other partners in their resulting loss sharing ratio.

The amount of cash each partner will receive as liquidating distribution when equipment is sold for the amount stated in each of the following cases.

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Answer 4

Question

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement 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, and drawings of a partner.

Chapter 16, Problem 16.3E

To determine