Roberts, Smith and Hinkson are partners who share profits 4:3:3, respectively. Smith decides that it would...

 

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Roberts, Smith and Hinkson are partners who share profits 4:3:3, respectively. Smith decides that it would be more profitable for her to operate as a sole proprietor. Roberts and Hinkson make repeated attempts to acquire Smith's interest in the partnership. Unable to reach an agreement, the partners mutually agree that their association should be dissolved. A condensed balance sheet before realization of assets shows the following balances: Liabilities and Capital Cash Other Assets Total Assets Stage 1 2 3 $10,000 Liabilities 120,000 Roberts, Capital Smith, Capital Hinkson, Capital $130,000 Total Asset realization is accomplished in three stages as follows: Sales Price $32,000 24,000 12,000 Book Value $24,000 20,000 76,000 $40,000 40,000 24,000 26,000 $130,000 Required: Prepare liquidation schedule and determine how the available assets will be distributed using a schedule of safe payments. [15 marks] Roberts, Smith and Hinkson are partners who share profits 4:3:3, respectively. Smith decides that it would be more profitable for her to operate as a sole proprietor. Roberts and Hinkson make repeated attempts to acquire Smith's interest in the partnership. Unable to reach an agreement, the partners mutually agree that their association should be dissolved. A condensed balance sheet before realization of assets shows the following balances: Liabilities and Capital Cash Other Assets Total Assets Stage 1 2 3 $10,000 Liabilities 120,000 Roberts, Capital Smith, Capital Hinkson, Capital $130,000 Total Asset realization is accomplished in three stages as follows: Sales Price $32,000 24,000 12,000 Book Value $24,000 20,000 76,000 $40,000 40,000 24,000 26,000 $130,000 Required: Prepare liquidation schedule and determine how the available assets will be distributed using a schedule of safe payments. [15 marks]

Answer rating: 100% (QA)

Here is a liquidation schedule for Roberts Smith and Hinkson Liquidation Schedule Stage Cash Receive... View the full answer