The Drysdale, Koufax, and Marichal partnership has the following balance sheet i

Question

The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to liquidation: Cash Noncash assets 269,000 Drysdale, loan 49,000 Liabilities $42,800 37,500 89,500 79,50 69,500 capital (50%) Drysdale, Koufax, capital (30%) Marichal, capital (20%) a. Liquidation expenses are estimated to be $28,000. Prepare a predistribution s?hedule to guide the distribution of cash. b. Assume that assets costing $87.000 are sold for $66,500. How is the available cash to be divided? Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B Assume that assets costing $87,000 are sold for $66,500. How is the available cash to be divided? Drysdale| Koufax | Marichal Reported balances Assumed loss Sohedule 1 Adjusted balances Assumed loss Schedule 2 Adjusted balances C Req A

Explanation / Answer

Reported balance of Drysdale include the amount of loan.

Req. A1. Assume that assets costing $87000 are sold for $65000. Prepare loss allocation table Partners Capital Balance Loss Allocation Maximum loss that can be absorbed Schedule 1 Drysdale $127,000 50% $254,000 Koufax $79,500 30% $265,000 Marichal $69,500 20% $347,500 Schedule 2 Koufax $3,300 60% $5,500 Marichal $18,700 40% $46,750 Req. A2. Predistribution schedule to guide the distribution of cash First $70,000 Liabilities $42,000 Liquidation expenses $28,000 Next $37,500 Drysdale loan 100% Next $5,500 Koufax 60% Marichal 40% All remaining cash $2,500 Drysdale 50% Koufax 30% Marichal 20% Req. B. How is the available cash to be divided Drysdale Koufax Marichal Reported balances $127,000 $79,500 $69,500 Assumed loss $254,000 $127,000 $76,200 $50,800 Schedule 1 50% 30% 20% Adjusted balances $0 $3,300 $18,700 Assumed loss $5,500 $3,300 $2,200 Schedule 2 60% 40% Adjusted balances $0 $0 $16,500

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