Prepare a cash distribution plan for given data

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Reference no: EM132082370

Question: Tye, Ula, Val, and Watt are partners who share profits and losses 40%, 30%, 20%, and 10%, respectively. The partnership will be liquidated gradually over several months beginning January 1, 2014. The partnership trial balance at December 31, 2013 is as follows:

Debits Credits

Cash $3,000

Accounts receivable 19,000

Inventory 25,000

Loan to Val 5,000

Furniture 15,000

Equipment 10,000

Goodwill 12,000

Accounts payable $ 13,600

Note payable 30,000

Loan from Tye 5,000

Tye, capital (40%) 15,000

Ula, capital (30%) 9,000

Val, capital (20%) 12,400

Watt, capital (10%) 4,000

Totals $ 89,000 $ 89,000

Required: Prepare a cash distribution plan for January 1, 2014, showing how cash installments will be distributed among the partners as it becomes available. Prepare vulnerability rankings for the partners and a schedule of assumed loss absorption

Reference no: EM132082370

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