The ABC Partnership Is to Be Liquidated and You Have

question 81

Essay

The ABC Partnership is to be liquidated and you have been hired to prepare a schedule of cash payments for the partnership. Partners A, B, and C share profit and losses in the ratio of 6:2:2 respectively. Assume the following:
1. Equipment was sold for $ 80,000.
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, calculate the following:
a) Cash available to be distributed to all partners.
b) Any gain or loss on sale of noncash assets.
c) The amount of cash to be received by each partner upon liquidation.

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Definitions:

Concrete Operational

A phase in Piaget’s cognitive development theory when children develop the capability to logically process information about tangible occurrences.

Logical Thinking

The process of reasoning consistently and drawing conclusions based on a systematic analysis of information.

Preoperational

A stage in Piaget's theory of cognitive development, occurring roughly between the ages of 2 and 7, characterized by symbolic thinking and egocentrism.

Theory Of Mind

The ability to attribute mental states—beliefs, intents, desires, emotions—to oneself and others and to understand that others have beliefs, desires, and intentions that are different from one's own.