Answer:
The correct answer is $22,000.
Explanation:
According to the scenario, the computation of the given data are as follows:
First we calculate the Non cash Assets prior to liquidation,
So, Non cash Assets = Capital account of Todd + Capital account of Gentry + Liabilities
= $25,000 + $49,000 + $3,000 = $77,000
Assets sold= $71,000
So, Gain or Loss on Liquidation = Assets sold - Non cash Assets
= $71,000 - $77,000 = -$6,000
So, Loss on liquidation = $6,000
As both partners share income and losses equally, then
Todd share in loss = $6,000 × 50% = $3,000
So, Todd cash balance = Capital account of Todd - Todd share in loss
By putting the value, we get
Todd cash balance = $25,000 - $3,000 = $22,000
(Note.= As there is no partner with name of Parker, Hence we calculate Todd cash balance.)
