Reference no: EM132478682

The following balance sheet is for a local partnership in which the partners have become very unhappy with each other.

Cash $ 50,000                                    Liabilities $ 40,000

Land 180,000                                     Adams, capital 114,000

Building 170,000                                 Baker, capital 42,000

Carvil, capital 80,000

Dobbs, capital 124,000

Total assets $400,000                   Total liabilities and capital $400,000

Point 1: To avoid more conflict, the partners have decided to cease operations and sell all assets. Using this information, answer the following questions. Each question should be viewed as an independent situation related to the partnership's liquidation.

Question 1: The building is immediately sold for $95,000 to give total cash of $145,000. The liabilities are then paid, leaving a cash balance of $105,000. This cash is to be distributed to the partners. How much of this money will each partner receive if profits and losses are allocated to Adams, Baker, Carvil, and Dobbs on a 1:3:3:3 basis, respectively? (Do not round intermediate calculations.)

Question 2: Assume that profits and losses are allocated to Adams, Baker, Carvil, and Dobbs on a 1:3:4:2 basis, respectively. How much money must the firm receive from selling the land and building to ensure that Carvil receives a portion? (Do not round intermediate calculations.)