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ankoles [38]
3 years ago
15

The following condensed balance sheet is for the partnership of Hardwick, Saunders, and Ferris, who share profits and losses in

the ratio of 4:3:3, respectively: Cash$82,000 Accounts payable$232,000 Other assets 760,000 Ferris, loan 43,000 Hardwick, loan 33,000 Hardwick, capital 270,000 Saunders, capital 170,000 Ferris, capital 160,000 Total assets$875,000 Total liabilities and capital$875,000 The partners decide to liquidate the partnership. Forty percent of the other assets are sold for $230,000. Prepare a proposed schedule of liquidation at this point in time. (Amounts to be deducted should be entered with a minus sign.)
Business
1 answer:
spin [16.1K]3 years ago
7 0

Question Completion:

Condensed Balance Sheet:

Cash                                      $115,000

Other assets                          760,000

Total assets                         $875,000

Accounts payable               $232,000

Ferris, loan                               43,000  

Hardwick, capital                   270,000

Saunders, capital                   170,000

Ferris, capital                         160,000

Total liabilities and capital $875,000

Answer:

The Partnership of Hardwick, Saunders, and Ferris

Proposed Schedule of Liquidation:

Net proceeds from sale of assets          $526,000

Share of net proceeds:

Hardwick    4/10 * $526,000 $210,400

Saunders   3/10 * $526,000  $157,800

Ferris         3/10 * $526,000  $157,800 $526,000

Explanation:

a) Data and Calculations:

Condensed Balance Sheet:                

Cash                                      $115,000    

Other assets                          760,000

Total assets                         $875,000

Accounts payable               $232,000

Ferris, loan                               43,000  

Hardwick, capital                   270,000

Saunders, capital                   170,000

Ferris, capital                         160,000

Total liabilities and capital $875,000

Schedule of Assets Disposal:

Cash                                                         $115,000    

Other assets:

40% of $760,000 ($304,000) sold for  230,000

60% of $760,000 ($456,000) sold for  456,000

Proceeds from disposal, including cash 801,000

Settlement of Accounts Payable          -232,000

Settlement of Ferris, loan                        -43,000

Net proceeds                                          526,000

                                  Hardwick   Saunders      Ferris

Capital accounts      $270,000   $170,000   $160,000

Final settlement          210,400     157,800      157,800

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