Baker, Strong, and Weak have called on you to assist them in
winding up the affairs of their partnership. You are able to gather
the following information.
1. The trial balance of the partnership at June 30, 2014, is as follows.
2. The partners share profits and losses as
follows: Baker, 40%; Strong, 40%; and Weak, 20%.
3. The partners are considering an offer of $100,000 for the accounts receivable, inventory, and plant and equipment as of June 30. The $100,000 would be paid to the partners in installments, the number and amounts of which are to be negotiated.
a.Prepare an advance cash distribution plan as of June 30, 2014.
b. Prepare a schedule to show how the potential cash ($106,000) would be distributed as it becomes available.
1. The trial balance of the partnership at June 30, 2014, is as follows.
| Debit | Credit | |||
| Cash | $6,000 | |||
| Accounts Receivable | 22,000 | |||
| Inventory | 14,000 | |||
| Plant and Equipment (net) | 99,000 | |||
| Baker, Advance | 12,000 | |||
| Weak, Advance | 7,500 | |||
| Accounts Payable | $17,000 | |||
| Baker, Capital | 67,000 | |||
| Strong, Capital | 45,000 | |||
| Weak, Capital | 31,500 | |||
| Total | $160,500 | $160,500 |
3. The partners are considering an offer of $100,000 for the accounts receivable, inventory, and plant and equipment as of June 30. The $100,000 would be paid to the partners in installments, the number and amounts of which are to be negotiated.
a.Prepare an advance cash distribution plan as of June 30, 2014.
b. Prepare a schedule to show how the potential cash ($106,000) would be distributed as it becomes available.
