The balance sheet of the Ama, Bade, and Calli partnership on May 1, 2014 (before commencement of
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Question:
The balance sheet of the Ama, Bade, and Calli partnership on May 1, 2014 (before commencement of partnership liquidation) was as follows:
Cash $ 108,000 Accounts payable $ 56,000
Inventory 120,000 Notes payable 120,000
Loan to Ama 20,000 Ama, capital (30%) 64,000
Loan to Calli 32,000 Bade, capital (50%) 180,000
Plant assets-net 220,000 Calli, capital (20%) 80,000
Total assets $ 500,000 Total liab./equity $ 500,000
Liquidation events in May were as follows:
- The inventory was sold for $12,000 below book value;
- Plant assets with a book value of $100,000 were sold for $120,000.
Required:
Determine how the available cash on May 31, 2014 should be distributed.
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