he partnership of Winn, Xie, Yang, and Zed has the following balance sheet: Cash

Question

he partnership of Winn, Xie, Yang, and Zed has the following balance sheet: Cash $ 44,000 Liabilities $ 53,000 Other assets 283,000 Winn, capital (50% of profits and losses) 74,000 Xie, capital (30%) 102,000 Yang, capital (10%) 54,000 Zed, capital (10%) 44,000 Zed is personally insolvent, and one of his creditors is considering suing the partnership for the $19,000 that is currently owed. The creditor realizes that this litigation could result in partnership liquidation and does not wish to force such an extreme action unless Zed is reasonably sure of obtaining at least $19,000 from the liquidation. Determine the amount for which the partnership must sell the other assets to ensure that Zed receives $19,000 from the liquidation? Liquidation expenses are expected to be $29,000. (Do not round intermediate calculations.)

Explanation / Answer

In this case Zed becomes insolvent .

Zed had 10% share and he owes $19000 and the partnership has to realise an amount of 190000(19000/10%)

after bearing liquidation expenses.

Let other assets value be x

then X-53000+44000-29000 = 190000

X =228000

The amount should be $228000

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