Question

Please explain the steps for the box that is incorrect

The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to liquidation: $ Cash Noncash assets 60,000 324,000 Liabilities Drysdale, loan Drysdale, capital (50%) Koufax, capital (30%) Marichal, capital (20%) $ 56,000 40,000 106,000 96,000 86,000 a-1. Determine the maximum loss that can be absorbed in Step 1. Then, assuming that this loss has been incurred, determine the next maximum loss that can be absorbed in Step 2. a-2. Liquidation expenses are estimated to be $20,000. Prepare a predistribution schedule to guide the distribution of cash. Further, modify the tags in explanation as well. b. Assume that assets costing $98,000 are sold for $72,000. How is the available cash to be divided? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Reg A1 Req A2 Reg B Liquidation expenses are estimated to be $20,000. Prepare a predistribution schedule to guide the distribution of cash. Further, modify the tags in explanation as well. First DRYSDALE, KOUFAX, AND MARICHAL Distribution of Available Cash $ 76,000 Liabilities $ 56.000 Liquidation 20,000 expenses 22,000 Marichal ✓ 100% 14.000 Marichal ✓ 40 % Koufax ✓ 60% Next Next All remaining 36,000 X Drysdale ✓ cash 50% ✓ Koufax Marichal 30% 20% ✓

Answer 1

All remaining cash

Opening cash balance	60,000
Sale of non cash assets	72,000
	132,000
Payment of liabilities	(56000)
Payment of liquidation expenses	(20,000)
Cash available for distribution	56,000