reply to this classmate.Evonne Bashaw

Aug 1 10:24pm

Reply from Evonne Bashaw

Wilkinson and Walker have many options for taking care ofthe $97,000 claim against partnership assets as part of Rogers' bankruptcy. At first, they could meet the creditor's demand by selling partnership assets like the building. Since the building is needed for operations, this would seriously delay their dental care services even though it would easily settle the debt. Secondly, in order to avoid a sudden asset sales, they could try to workout a payment plan with the creditor, maybe using thecash on hand and earnings in the future. However, this route carries a risk of long-term financial hardship. Thirdly, in order to get back control and lower theliability risk, Wilkinson and Walker could try to buy out Rogers' partnership interest; but this would require money that they might not have on hand. Last but not least, they can look for more funding or loans to pay for the claim, securing assets but raising partnership risk and debt. Each choice creates a compromise between operational continuity and financial stability. Although all have major risks, negotiating or financing could offer easier choices than asset liquidation considering how important the building isto their practice (Hoyle, Schaefer, & Doupnik, 2021).

Hoyle, J. B., Schaefer, T., & Doupnik, T. S. (2021). Advanced Accounting (13th ed.). McGraw-Hill Education.