You now have $310,000 of fixed assets remaining, at book value, to dispose of, but you cannot determine what amount of cash these will generate.

Required: 

Prepare a schedule of partnership liquidation that clearly shows how the cash would be paid out (i.e., to whom and how much): (a) on July 15, Year 4. (b) on July 25, Year 4. (c) on July 30, Year 4.

Balance Sheet

Cash $ 18,000

Receivables 39,000

Inventory 80,000

Fixed assets, net 410,000 $

547,000

Current liabilities $ 47,000

Note payable to Muffin 40,000

Muffin, capital 110,000

Nemrod, capital 160,000

Olerud, capital 190,000

$547,000

The partners share the profits, 50%, 30%, 20% to Muffin, Nemrod, Olerud. The partners have decided to wind up their company, and as the accountant, you must conduct the liquidation. The cash must be paid out as soon as it is received because of animosity among the partners. You proceed to liquidate the assets and receive cash in the following manner:
Dates Cash received Book value

July 15, Year 4 $7,000(Receivable) 9,000(Receivable)

$31,000 40,000(Inventory)

July 25, Year 4 $11,000(receivable) 15,000(Receivables)

$24,000(Inventory) 40,000 (Inventory)

July 30, Year 4 $8,000 $ 15,000 (Receivables)

86,000 100,000 (Fixed assets)

Answer rating: 100% (QA)

All amounts are in Particulars Cash Receivables Inventory Fixed Assets Current Liabilities Muffin Nemrod Olerud Balance 18000 39000 80000 410000 47000 ... View the full answer