Reference no: EM132877610

Question - A balance sheet for the partnership of Paul, Ceres and Nava who share profits in the ratio of 2:1:1 shows the following balances just before liquidation:

Cash 12,000

Other assets 59,500

Total 71,500

Liabilities 20,000

Paul, Capital 22,000

Ceres, Capital 15,500

Nava, Capital 14,000

Total 71,500

On the first month of the liquidation, certain assets are sold for 32,000. Liquidation expenses of 1,000 are paid and additional liquidation expenses are anticipated. Liabilities are paid amounting to 5,400 and sufficient cash is retained to ensure the payment to creditors before making payments to partners. On the first payments to partners, Paul receives 6,250.

Required -

(1) Compute the total cash distributed to the partners in the first installment?

(2) Compute the amount of cash withheld for anticipated liquidation expenses and unpaid liabilities.