In its loss simulation schedule, what is the amount of assumed loss in step 1? Q

Question

In its loss simulation schedule, what is the amount of assumed loss in step 1?

Question 13 options:

$130,000

$120,000

$140,000

$150,000

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$130,000

$120,000

$140,000

$150,000

show work

The partnership of Wingler, Noris Rodgers, and Guthrie was formed several years ago as a architectural firm. Several partnersrecently had personal financial problems and decided to terminate operations and liquidate the business The following balance sheet ?mmarizec its financial information on January 5 at the beginning of thisprocess: Cash Accounts Receivable InventorY Land Building and Equipment (net! Total Assets $15,000 82,000 101,000 85,000 168 000 451,000 Liabilities Rodgers, Loan Wingler, Capital Norris, Capital Rodgers Capital Gu thrie, Capital Total Liabilties and Capital $74,000 35,000 120,000 88,000 74,000 51,000 The estimated liquidation expenses were Profit and loss allocation ratio according to the provisions of partnership agreement: 16,000 Wingler Norris Rodgers Guthrie 30% 10% 20% 40% The following transactions occurred during the liquidation Jan. 14 Collected 80% of the total accounts receivalbe with the rest judged to be uncollectible Feb. 23 Sold the land, building and equipment for Mar. 11 Made safe capital distributions Mar.29 Learned that Guthrie became personally in solvent Apr, 3 Paid al liabilities Jun. 30 Sold al ventory for Jul 13 Made safe capital distributions again Sep, 26 Paid liquidation expenses Nov, 4 Made final cash distrubtions to the partners based on the assimption thatall partners except Guthi are personally solvent. 80% 150,000 71,000 11,000

Explanation / Answer

$150,000

Maximum loss that can be absorbed= Lowest of the above= $150,000

Partner Capital/Loss Allocation Maximum Loss Wingler 120000/30% 400000 Norris 88000/10% 880000 Rodgers 74000/20% 370000 Guthrie 60000/40% 150000

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