The partnership of Larson, Norrls, Spencer, and Harrison has declded to terminat

Question

The partnership of Larson, Norrls, Spencer, and Harrison has declded to terminate operations and liquidate all business property During this process, the partners expect to Incur $8,000 In liquidation expenses. All partners are currently solvent. The balance sheet reported by this partnership at the time that the liquidation commenced follows. The percentages Indicate the allocation of profits and losses to each of the four partners. Cash Accounts receivable Inventory Land and buildings Equipment $28,25 Liabilities $47,9ee 15,998 44,eee 39,000 23,000 Larson, capital (28%) Norris, capital (30%) Spencer, capital (28%) 75,808 41,259 $238,25e 104,000 Harrison, capital (38%) Total assets $238,25e Total liabilities and capital Based on the Information provided, prepare a predistribution plan for liquidating this partnership. Complete this question by entering your answers in the tabs below Partne AllocationBalances Prepare the loss allocation table Maximum Loss Partner Capital Balance Loss AllocationThat Can Be Absorbed Schedule 1 Larson Norris Spencer Harrisorn Schedule 2 Larson Norris Spencer Harrisorn Schedule 3 Larson Norris Spencer Harrisorn

Explanation / Answer

Particulars

Amount ($)

Total assets of the partnership

238250

Less: Outside liabilities of the partnership

47000

Net asset of the partnership

191250

Less: loss on liquidation

8000

Assets available for distribution

183250

Larson

Norris

Spencer

Harrison

Partners' capital balances

15000

60000

75000

41250

191250

Less: Loss on liquidation (20:30:20:30)

1600

2400

1600

2400

8000

13400

57600

73400

38850

183250

Less: Distribution of assets

13400

57600

73400

38850

183250

Capital balance after liquidation

Nil

Nil

Nil

Nil

Nil

The loss on liquidation of $8000 has been divided on the basis of profit and loss sharing ratio of partners, i.e. 20: 30:20:30.

Particulars

Amount ($)

Total assets of the partnership

238250

Less: Outside liabilities of the partnership

47000

Net asset of the partnership

191250

Less: loss on liquidation

8000

Assets available for distribution

183250

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