The ABC Partnership Is to Be Liquidated and You Have

question 128

Essay

The ABC Partnership is to be liquidated and you have been hired to prepare a Schedule of Cash Payments for the partnership. Partners Alexa Bitsy and Coco share income and losses in the ratio of 4:3:3 respectively. Assume the following:
1. The noncash assets were sold for $70000.
2. Liabilities were paid in full.
3. The remaining cash was distributed to the partners. (If any partner has a capital deficiency assume that the partner is unable to make up the capital deficiency.)
Instructions
Using the above information complete the Schedule of Cash Payments below:

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Definitions:

Dividend Income

Income received from owning shares in a company, which is often taxable at different rates than regular income.

Distribution

The action of sharing something out among a number of recipients, often used in the context of financial assets or dividends.

Transferors Own 80%

A situation in a business transaction where the original owners or transferors retain an 80% ownership interest in the property or entity after the transaction is completed.

Tax-Free

Earnings, income, or transactions that are not subject to tax by the government.