1.A.a (Goodwill to mises only)
calculation of mises goodwill = $600000-$570000=$30000
mises's goodwill will be equal to $30000
mises retirement will be recorded as follows
Goodwill	$30,000
mises's capital	$570,000
cash		$600,000
Question 1.A.b (Goodwill to the whole entity)
calculation of Hayek goodwill= {(25/60)*$30000}= $12500
calculation of Bohn-Bawerk= {(15/60)*$30000}= $ 7500
Total Goodwill= $30000+$12500+$7500=$50000
mises retirement will be recorded as follows
Goodwill	$50,000
mises's capital		$30,000
Hayek's capital		$12,500
Bohn-Bawerk's capital		$7,500
mises's capital	$600,000
cash		$600,000
Question 1.B.a
value of new partnership suggested by ropke= (250,000/20%)=$125,0000
Ropke should have paid= $125,0000-($150,000+$570,000+$310,000)=$220,000
Goodwill= $250,000-$230,000= $30,000
ropke admission will be recorded as follows
cash	$250,000
Goodwill	$30,000
mises capital		$18,000
Hayek capital		$7,500
Bohm-Bawerk capital		$4,500
Ropke capital		$250,000
Question 1.C
	loss absorption power			capital account
	mises	Bohm-Bawerk	Hayek	mises	Hayek	Bohm-Bawerk
loss sharing percentage				60%	25%	15%
preliquidation capital balance				$570,000	$310,000	$150,000
loss absorption power	$950,000	$1,240,000	$1,000,000
decrease highest LAP to next level		($240,000)	0	0	($60,000)	0
	$950,000	$1,000,000	$1,000,000	$570,000	$250,000	$150,000
decrease the current LAP to the next level		($50,000)	($50,000)	0	($12,500)	($7,500)
	$950,000	$950,000	$950,000	$570,000	$237,500	$142,500
	summary of cash distribution first ($570000+$310000+$150000) is to the creditors next $60000 is to Bohn-Bawerk next $12500 is to hayek, next $7500 is to bohm-bawerk final any other distribution is done according to the profit-loss percentage that is 60%, 25%, 15% as shown in the cash ditribution plan table above
	Question 1.D
For the first $70000
	mises	hayek	Bohm-Bawerk
layer 1 ($60000)	0	$60,000	$0
layer 2 ($10000)	0	6250	3750
total	0	$66,250	$3,750
for the next $30000 will be shared according to the profit-loss percentage
mises share	18000
Hayek share	7500
Bohm-Bawerk share	4500
total	30000
Question II.A
	mises	hayek	Bohm-Bawerk
ratio (7:5:2)
Equity (nets of loans)	$569,000	$310,000	$151,000
(150000+700000+100000)= $950000 loss on all assets	475000	339285.7143	135714.2857
$20000 contigency	10000	7142.857143	2857.142857
Balance	$84,000	($36,429)	$12,429
new ratio 7:2	28333.66667	36429	8095.333333
safe payment	$56,666	$0	$4,333
record payment to the partner(s)
mises capital	$56,666
Bohm-Bawerk	$4,333
cash		$60,000

Answer rating: 100% (QA)

Question 1Aa Goodwill to mises only calculation of mises goodwill 60000057000030000 misess goodwill will be equal to 30000 mises retirement will be re... View the full answer