Jones, Marge, and Tate LLP Decided to Dissolve and Liquidate

question 26

Essay

Jones, Marge, and Tate LLP decided to dissolve and liquidate the partnership on September 30, 2011. After realization of a portion of the noncash assets, the capital account balances were Jones $50,000; Marge $40,000; and Tate $15,000. Cash of $35,000 and other assets with a carrying amount of $100,000 were on hand. Creditors' claims totaled $30,000. Jones, Marge, and Tate shared net income and losses in a 2:1:1 ratio, respectively.
Prepare a working paper to compute the amount of cash that may be paid to creditors and to partners at this time, assuming that no partner is solvent.

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Definitions:

Credibility

The quality of being trusted and believed in, often based on a reputation for integrity and reliability.

Knowledgeable

Possessing or showing a high level of information, understanding, or skill in a particular subject or field.

Redesigning Work Processes

The act of reevaluating and modifying the operations and procedures within a workplace to improve efficiency, productivity, and employee satisfaction.

Plant Productivity

The measure of the efficiency with which a production or manufacturing facility converts inputs into outputs.