Question

what is the the Sale of Assets & Repaid to Partnership?

Saved Help S: Homework Problems i ! Required information Use the following information for the Exercises below. (The following information applies to the questions displayed below) Turner, Roth, and Lowe are partners who share income and loss in a 2:3:5 ratio (in percents: Turner, 20%; Roth, 30%; and Lowe, 50%). The partners decide to liquidate the partnership. Immediately before liquidation, the partnership balance sheet shows total assets, $154,800 total liabilities, $102,000; Turner , Capital, $4,900; Roth, Capital, $15,200; and Lowe, Capital, $32,700. Cash received from selling the assets was sufficient to repay all but $40,000 to the creditors. Exercise 12-14 Liquidation of limited partnership LO P5 Assume that the Turner, Roth, and Lowe partnership is a limited partnership, Turner and Roth are general partners and Lowe is a limited partner. How much should each partner contribute to cover the remaining capital deficiency of $40,000? (Do not round intermediate calculations. Losses and deficits amounts to be deducted should be entered with a minus sign.) Complete this question by entering your answers in the tabs below. Sale of Assets Amount to be Repaid to < Prev 9 of 10 Next >

Answer 1

Answer:

Given : 1. Turner = 20% , Roth = 30% and Lowe = 50%

2. Total Assets = Rs.154800

3. Total Liabilities = Rs.102000

4. Capital :

Turner=4900, Roth = 15200 and Lowe= 32700

5. Cash received after selling of assets= Rs.40000

To Find:

1. Cash proceeds from sale of assets

2. Amount to be repaid to partnership

Solution:

Particulars	Rs.	Rs.
Total Book Value of Assets		154800
Total Liabilities before liquidation	102000
Total Liabilities remaining after paying asset sales to creditors	40000
Cash proceeds from sale of assets		62000
Loss on sale of assets		92800

Hence Loss on sale of assets is Rs.92800

B. Calculate Gain(Loss) on  sale of assets

Particulars		Turner		Roth		Lowe	Total
Initial Capital		4900		15200		32700	52800
Allocation of Loss	20%	(18560)	30%	(27840)	50%	(46400)	(92800)
Capital Balance after Gain (Loss)		(13660)		(12640)		(13700)	(40000)

C. Allocation of Lowe Deficit to Turner and Roth

Particulars		Turner		Roth		Lowe	Total
Allocation of Lowe Deficit to Turner and Roth	2/5	(5480)	3/5	(8220)		(13700)
Capital Balance after deficit allocation		(19140)		(20860)			(40000)
Amount to be repaid to partnership	20%	8000	30%	12000	50%	20000	(40000)
Total		(11140)		(8860)		6300