Delphine, Xavier, and Olivier share profits and losses in the ratio of 5:4:1, re
ID: 2436460 • Letter: D
Question
Delphine, Xavier, and Olivier share profits and losses in the ratio of 5:4:1, respectively. The partners have agreed to terminate the business and estimate that $15,400 in liquidation expenses will be incurred.
What is the amount of cash that safely can be paid to partners prior to liquidation of noncash assets?
Which partner should receive the cash distribution from (a)?
a.
What is the amount of cash that safely can be paid to partners prior to liquidation of noncash assets?
b.
Which partner should receive the cash distribution from (a)?
Cash $ 72,240 Liabilities $ 48,500 Noncash assets 134,000 Delphine, capital 91,600 Xavier, capital 57,000 Olivier, capital 9,140 Total assets $ 206,240 Total liabilities and capital $ 206,240Explanation / Answer
Ans a In $ Cash that can be safely distributed 8340 Cash-liabilities-liquidation expenses 72240-48500-15400 8340 ans b Potential loss+Liquidation exp (15400+134000) 149400 Allocation Delphine xavier Olivier Opening bal 91600 57000 9140 allocation of potential loss 134000*(5:4:1) -67000 -53600 -13400 Liquidation expenses 15400*(5:4:1) -7700 -6160 -1540 16900 -2760 -5800 As Delphine radio has surplus capital balance he should be given safe cash of $8340 any doubt please comment
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