Adams, Peters, and Blake share profits and losses for their APB Partnership in a ratio of...

Transcribed Image Text:

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: Assets Liabilities and Capital Cash Adams, Loan Other Assets $ 55,000 13,000 230,000 Liabilities Adams, Capital $ 46,500 71,500 Peters, Capital 97,500 Blake, Capital 82,500 $ 298,000 Total Liabilities and Equities $ 298,000 Total Assets 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: Blake Decrease LAPS to next highest: Adams Blake Peters APB PARTNERSHIP Cash Distribution Plan Adams Loss Absorption Potential Peters Blake Adams Capital Accounts Peters Blake 20% 30% 50 % $ 71,500 (13,000) $ 58,500 $ 97,500 $82,500 0 0 $ 97,500 $82,500 357,500 325,000 165,000 0 0 $ 357,500 $325,000 $165,000 $ 58,500 $ 97,500 $82,500 0 0 $ 357,500 $325,000 $165,000 $ 58,500 $ 97,500 $82,500 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: Assets Liabilities and Capital Cash Adams, Loan Other Assets $ 55,000 13,000 230,000 Liabilities Adams, Capital $ 46,500 71,500 Peters, Capital 97,500 Blake, Capital 82,500 $ 298,000 Total Liabilities and Equities $ 298,000 Total Assets 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: Blake Decrease LAPS to next highest: Adams Blake Peters APB PARTNERSHIP Cash Distribution Plan Adams Loss Absorption Potential Peters Blake Adams Capital Accounts Peters Blake 20% 30% 50 % $ 71,500 (13,000) $ 58,500 $ 97,500 $82,500 0 0 $ 97,500 $82,500 357,500 325,000 165,000 0 0 $ 357,500 $325,000 $165,000 $ 58,500 $ 97,500 $82,500 0 0 $ 357,500 $325,000 $165,000 $ 58,500 $ 97,500 $82,500