The partnership of Anderson, Berry, Hammond, and Winwood is being liquidated. It currently holds cash of $22,600 but no other assets. Liabilities amount to $51,400. The capital balances are
Anderson (40% of profits and losses) | $ | 18,200 | ||
Berry (40%) | 25,000 | |||
Hammond (10%) | (36,000 | ) | (deficit) | |
Winwood (10%) | (36,000 | ) | (deficit) | |
a. If both Hammond and Winwood are personally insolvent, how much money must Berry contribute to this partnership?
b-1. If only Winwood is personally insolvent, how much money must Hammond contribute?
b-2. If only Winwood is personally insolvent, how will Hammond's contribution (funds) be disbursed?
c. If only Hammond is personally insolvent, how much money should Anderson receive from the liquidation?
(Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.)
Part A
Berry will have to contribute $11,000. The $72,000 in deficit capital balances will have to be absorbed by Anderson and Berry on a 4:4 basis. Thus, Berry will be allocated |
|||||||
$36,000 ($72,000 x 4/8), which creates a deficit for this partner of $11,000 ($25,000 - $36,000). |
|||||||
Part B Hammond will have to contribute $40000 [$36,000 + ($36,000 x 1/9)]. As Winwood is insolvent, his deficit of $36000 will be absorbed by the remaining partners in the ratio of 4:4:1 and this will increase the deficit of Hammond by 1/9 of 36000.
|
|||||||
(c) Anderson should receive $2200. If Hammond is insolvent, the $36,000 |
|||||||
deficit balance will have to be absorbed by the remaining three partners on a 4:4:1 |
|||||||
basis. This would decrease Anderson’s capital balance by $16000 (4/9 x $36,000) to |
|||||||
$2200 (18200-16000). |
|||||||
The partnership of Anderson, Berry, Hammond, and Winwood is being liquidated. It currently holds cash of...
The partnership of Anderson, Berry, Hammond, and Winwood is being liquidated. It currently holds cash of $21,500 but no other assets. Liabilities amount to $37,000. The capital balances are Anderson (30% of profits and losses) Berry (20%) Hammond (30%) Winwood (208) $25,500 19,000 (28,000) (deficit) (32,000) (deficit) a. If both Hammond and Winwood are personally insolvent, how much money must Berry contribute to this partnership? b-1. If only Winwood is personally insolvent, how much money must Hammond contribute? b-2. If...
The partnership of Anderson, Berry, Hammond, and Winwood is being liquidated. It currently holds cash of $22,500 but no other assets. Liabilities amount to $35,600. The capital balances are Anderson (40% of profits and losses) $ 27,900 Berry (20%) 13,000 Hammond (20%) (25,000 ) (deficit) Winwood (20%) (29,000 ) (deficit) a. If both Hammond and Winwood are personally insolvent, how much money must Berry contribute to this partnership? b-1. If only Winwood is personally insolvent, how much money must Hammond...
The partnership of Anderson, Berry, Hammond, and Winwood is being liquidated. It currently holds cash of $21,500 but no other assets. Liabilities amount to $37,000. The capital balances are Anderson (30% of profits and losses) Berry (20%) Hammond (30%) Winwood (20%) $ 25,500 19,000 (28,000) (deficit) (32,000) (deficit) a. If both Hammond and Winwood are personally insolvent, how much money must Berry contribute to this partnership? b-1. If only Winwood is personally insolvent, how much money must Hammond contribute? b-2....
A partnership has liquidated all assets but still reports the following account balances: Beck, loan $ 6,000 Cisneros, capital (40%) 3,600 Beck, capital (20%) (13,200 ) (deficit) Sadak, capital (10%) (9,200 ) (deficit) Emerson, capital (20%) 18,000 Page, capital (10%) (7,200 ) (deficit) The partners split profits and losses as follows: Cisneros, 40 percent; Beck, 20 percent; Sadak, 10 percent; Emerson, 20 percent; and Page 10 percent. Assuming that all partners are personally insolvent except for Sadak and Emerson, how...
A partnership has liquidated all assets but still reports the following account balances: Beck, loan $ 5,000 Cisneros, capital (40%) 3,300 Beck, capital (20%) (12,100 ) (deficit) Sadak, capital (10%) (8,100 ) (deficit) Emerson, capital (20%) 16,000 Page, capital (10%) (6,100 ) (deficit) The partners split profits and losses as follows: Cisneros, 40 percent; Beck, 20 percent; Sadak, 10 percent; Emerson, 20 percent; and Page 10 percent. Assuming that all partners are personally insolvent except for Sadak and Emerson, how...
A partnership has liquidated all assets but still reports the following account balances: $ Beck, loan Cisneros, capital (40%) Beck, capital (20%) Sadak, Capital (10%) Emerson, Capital (20%) Page, capital (18x) 8.5ee 4,500 (9,580) (deficit) (10,380) (deficit) 16,100 (8,380) (deficit) The partners split profits and losses as follows: Cisneros, 40 percent, Beck, 20 percent; Sadak, 10 percent; Emerson, 20 percent; and Page 10 percent. Assuming that all partners are personally insolvent except for Sadak and Emerson, how much cash must...
The partnership of W, X, Y, and Z has the following balance sheet: Cash $ 51,000 Liabilities $ 65,000 Other assets 306,000 W, capital (50% of profits and losses) 81,000 X, capital (30%) 99,000 Y, capital (10%) 61,000 Z, capital (10%) 51,000 Z is personally insolvent, and one of his creditors is considering suing the partnership for the $26,000 that is currently due. The creditor realizes that liquidation could result from this litigation and does not wish to force such...
A partnership has liquidated all assets but still reports the following account balances for its partners: Beck, loan$9,500Cisneros, capital (40%)3,000Beck, capital (20%)(13,000)(deficit)Sadak, capital (10%)(9,000)(deficit)Emerson, capital (20%)14,500Page, capital (10%)(7,000)(deficit) The partners split profits and losses as follows: Cisneros, 40 percent; Beck, 20 percent; Sadak, 10 percent; Emerson, 20 percent; and Page 10 percent. Assuming that Cisneros, Beck, and Page are personally insolvent, how much cash must Sadak now contribute to this partnership?
1. A partnership has the following account balances: Cash, $91,000; Other Assets, $645,000; Liabilities, $326,000; Nixon (50% of profits and losses), $185,000; Cleveland (30%), $135,000; Pierce (20%), $90,000. The company liquidates, and $18,500 becomes available to the partners. Who gets the $18,500? (Do not round intermediate calculations.) Nixon Cleveland pierce safe payments 2. The partnership of W, X, Y, and Z has the following balance sheet: Cash $ 52,000 Liabilities $ 66,000 Other assets 315,000 W, capital (50%...
Help!! Please review carefully. The following balance sheet is for a local partnership in which the partners have become very unhappy with each other. $ Cash Land Building 45,000 155,000 145,000 Liabilities Adams, capital Baker, capital Carvil, capital Dobbs, capital Total liabilities and capital $ 35,000 97,000 36,000 70,000 107,000 $ 345,000 Total assets $ 345,000 To avoid more conflict, the partners have decided to cease operations and sell all assets. Using this information, answer the following questions. Each question...