Answer:
Alex and Bess Partnership
Part A: Step-by-step Distribution:
Cash Noncash assets Liabilities Alex Bess
December 31 $48,000 $135,000 $36,000 $94,500 $52,500
Safe cash
distribution (26,400) 0 0 (18,480) (7,920)
1st Liabilities (21,600) 0 (21,600) 0 0
Sale of noncash 147,000 (135,000) 8,400 3,600
Safe cash distrib. (100,000) (70,000) (30,000)
Final liabilities (14,400) 0 (14,400) 0 0
Liquidation expense (4,100) 0 (2,870) (1,230)
Final distribution (28,500) 0 (11,550) (16,950)
Part B: Final Statement of Partnership Liquidation:
Cash Noncash assets Liabilities Alex Bess
December 31 $48,000 $135,000 $36,000 $94,500 $52,500
Sale of noncash 147,000 (135,000) 8,400 3,600
Payment of liabilities (36,000) (36,000)
Liquidation expenses (4,100) 0 (2,870) (1,230)
Distribution (154,900) 0 0 (100,030) (54,870)
Explanation:
a) Data and Calculations:
Profits and losses sharing ratio = 70:30
Estimated liquidation expenses = $5,500
Balance Sheet at Liquidation Date:
Cash $48,000 Liabilities $36,000
Noncash assets 135,000 Alex, capital 94,500
Bess, capital 52,500
Total assets 183,000 Total liabilities and capital $ 183,000
