The partnership of Anderson, Berry, Hammond, and Winwood is being liquidated. It currently holds cash of...

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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 $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 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?

business accounting

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Answer 1

Answer #1

Answer a.

Berry contribute to this partnership = [(25000+29000)*20/60] - 13000 = 5000

Answer b1.

Hammond contribute = [ 29000 * 20/80 ] +25000 = 32250

Answer b2.

Creditors = 13100

Anderson = [29000 *40/80] - 27900 = 13400

Berry = [29000 *20/80] - 13000 = 5750

Answer c.

= 25000 *40/80 = 12500

= 27900 -12500

= 15400

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Answer 2

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