Prepare a cash distribution plan for given data

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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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