Reference no: EM132698390

Question - On January 1, the partners Mary, Helen, and Jane (who share profits and losses in the ratio of 5:3:2, respectively) decide to liquidate their partnership. The trial balance at this date is as follows:

Debits Credits

Cash $25,000

Accounts Receivable $80,000

Inventory $66,000

Machinery and Equip, net $203,000

Mary, Loan $44,000

Accounts Payable $81,000

Helen, Loan $34,000

Mary, Capital $125,000

Helen, Capital $97,000

Jane, capital $81,000

The partners plan a program of piecemeal conversion of the partnership's assets to minimize liquidation losses. All available cash, less an amount retained to provide for future expenses, is to be distributed to the partners at the end of each month. A summary of the liquidation transactions follows:

January Collected $58,000 of the accounts receivable; the balance is deemed uncollectible.

Received $45,000 for the entire inventory.

Paid $9,000 in liquidation expenses.

Paid $72,000 to the outside creditors after offsetting a $9,000 credit memorandum received by the partnership on January 11.

Retained $17,000 cash in the business at the end of January to cover any unrecorded liabilities and anticipated expenses. The remainder is distributed to the partners.

February

Paid $10,000 in liquidation expenses.

Retained $5,000 cash in the business at the end of the month to cover unrecorded liabilities and anticipated expenses.

March

Received $153,000 on the sale of all machinery and equipment.

Paid $12,000 in final liquidation expenses.

Retained no cash in the business.

Required - Prepare schedule to compute the safe installment payments made to the partners at the end of each of these three months.