Question

Use the following information for questions 1 and 2. On June 30, 2020, the Warls, Xin, and Yates partnership had the following fiscal year-end balance sheet: Cash $ 4,000 Accounts payable $ 7,000 Accounts receivable 6,000 Loan from Xin 5,000 Inventory 14,000 Warle, capital(20%) 14,000 Plant assets-net 12,000 Xin, capital(30%) 10,000 Loan to Warls 6.000 Yates, capital(50%) 6,000 Total assets 42,000 Total liab,/equity $ 42,000 The percentages shown are the residual profit and loss sharing ratios. The partners dissolved the partners on July 1, 2020, and began the liquidation process. During July the following events occurred: Receivables of $3,000 were collected. The inventory was sold for $4,000. All available cash was distributed on July 31, except for $2,000 that was set aside for contingent expenses. 1. The book value of the partnership equity (i.e., total equity of the partners) on June 30, 2020 is: I The cash available for distribution to the partners on July 31, 2020 is: 2. 3. Abe, Barr, and Cane are in the process of liquidating their partnership. Since it may take several months to convert the other assets into cash, the partners agree to distribute all available cash immediately, except for $10,000 that is set aside for contingent expenses. The balance sheet and residual profit and loss sharing percentages are as follows: Cash $400,000 Accounts payable $200,000 Other assets 200,000 Abe, capital (40%) 135,000 Barr, capital (30%) 216,000 Cane, capital (30%) 49.000 Total assets $.600.000 Total liab./equity S600.000 How much cash should Barr receive in the first distribution?

Answer 1

Please refer to the following image for answers of all the 3 questions

Roge! Solution to si Book value of the pagetnership 3 equity on June 30 20026 Method: Waale's clopited Xin's capital Yale's capital of partna's equity MOOO 10000 6000 39000 Took value Method 2! letu Assets decounts payable Lean from xin $ 42000 $ (2000) $ (5000) 30000 Book value of pagenership's eqcupy Note: you can tre any of the aboue method. solution to da cash balance as on 30. June, 2020 Eti Recewable collected $ 4000 $ 3000 wooo As Inventory soul $ 11000 $ (2000) . es Amount hept aride for contingent expensis $ 9000 cash arcellichle pres the distribution to partners Solution to da balance sheet cash halunu to ea as per Go wash hept asede for contingent egemes lish Create available fos distoubutión a $ 400000 $ 10000 390000 390000 X 30% a $ 119000 .' :. Cash Bars will recente