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The partnership of Hendrick, Mitchum, and Redding has the following account balances: Cash . . . . . . .

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The partnership of Hendrick, Mitchum, and Redding has the following account balances:

Cash . . . . . . . . . . . . . . . . . . . . . . $ 50,000

Noncash assets . . . . . . . . . . . . . . .135,000

Hendrick, capital . . . . . . . . . . . . . 100,000

Liabilities . . . . . . . . . . . . . . . . . . $ 30,000

Mitchum, capital . . . . . . . . . . . . . . 70,000

Redding, capital . . . . . . . . . . . . . (15,000)

This partnership is being liquidated. Hendrick and Mitchum are each entitled to 40 percent of all profits and losses with the remaining 20 percent going to Redding.

(a). What is the maximum amount that Redding might have to contribute to this partnership because of the deficit capital balance?

(b). How should the $20,000 cash that is presently available in excess of liabilities be distributed?

(c). If the noncash assets are sold for a total of $50,000, what is the minimum amount of cash that Hendrick could receive?

Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...

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a 42 000 Maximum losses of 135 000 on the noncash assets would increase Reddings s deficit balance b…View the full answer


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Mugdha Sisodiya
My self Mugdha Sisodiya from Chhattisgarh India. I have completed my Bachelors degree in 2015 and My Master in Commerce degree in 2016. I am having expertise in Management, Cost and Finance Accounts. Further I have completed my Chartered Accountant and working as a Professional. Since 2012 I am providing home tutions.
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Related Book For  answer-question
Advanced Accounting

Advanced Accounting

ISBN: 9781260247824

14th Edition

Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik

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Question Details
Chapter # 15- Partnerships: Termination and Liquidation
Section: Problems
Problem: 25
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Question Posted: March 17, 2017 11:04:48
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