PROBLEM I:
The Keaton, Lewis, and Meador partnership had the following balance sheet just before entering liquidation:
CASH |
10000 |
|
LIABILITIES |
130000 |
NON CASH ASSETS |
300000 |
|
KEATON CAPITAL |
60000 |
|
|
|
LEWIS CAPITAL |
40000 |
|
|
|
MEADOR CAPITAL |
80000 |
TOTALS |
310000 |
|
TOTALS |
310000 |
Keaton, Lewis, and Meador share profits and losses in a ratio of 2:4:4. Noncash assets were sold for $180,000. Liquidation expenses were $12,000.
PART A:
Assume that Lewis was personally insolvent and could not contribute any assets to the partnership, while Keaton and Meador were both solvent. What amount of cash would Keaton and Meador have received from the distribution of partnership assets?
PART B:
Assume that Keaton was personally insolvent with assets of $8,000 and liabilities of $60,000. Lewis and Keaton were both solvent and able to cover deficits in their capital accounts, if any. What amount of cash could Keaton's personal creditors have expected to receive from partnership assets?
PROBLEM II:
The Henry, Isaac, and Jacobs partnership was about to enter liquidation with the following account balances:
CASH |
90000 |
|
LIABILITIES |
60000 |
NON CASH ASSETS |
300000 |
|
|
|
80000 |
|
|
|
|
|
110000 |
|
|
|
|
|
140000 |
TOTALS |
390000 |
|
TOTALS |
390000 |
Estimated expenses of liquidation were $10,000. Henry, Isaac, and Jacobs shared profits and losses in a ratio of 2:4:4.
What amount of safe cash was available, based on the above information?