Question

Exercise 12-8 Sedgwick Company at December 31 has cash $22,400, noncash assets $104,000, liabilities $51,800, and the following capital balances: Floyd $47,500 and DeWitt $27,100. The firm is liquidated, and $118,000 in cash is received for the noncash assets. Floyd and DeWitt income ratios are 70% and 30%, respectively. Prepare a schedule of cash payments. (If an amount reduces the account balance then enter with a negative sign preceding the number e.g. -15,000 or parenthesis e.g. (15,000).) SEDGWICK COMPANY Schedule of Cash Payments Item Noncash Floyd, Cash = Liabilities DeWitt, Assets Capital Capital Balances before liquidation $22,400 $104,000 $51,800 $47,500 $27,100 Sale of noncash assets and allocation of gain New balances + Pay liabilities New balances Cash distribution to partners $ Final balances Click if you would like to Show Work for this question: Open Show Work

Answer 1

SEDGWICK COMPANY Schedule of Cash Payments + Liabilities + Cash 22400 Floyd Dewitt Capital 70% Capital 30% 47500 27100 51800 Non Cash assets 104000 -118000 14000 118000 9800 4200 Item Balances before liquidation Saleof Non cash assets and allocation of gain Allocation of gain New Balances Pay Liabilities New Balances Cash distribution to partners Final balances 0 57300 31300 140400 -51800 51800 -518001 0 31300 88600 -88600 57300 -57300 0 -31300 0 0 0 0