Question

On January 1, the partners of Van, Bakel, and Cox (who share profits and losses in the ratio of 5:3:2, respectively) decide to liquidate their partnership. The trial balance at this date follows:

	Debit		Credit
Cash	$	22,000
Accounts receivable		74,000
Inventory		60,000
Machinery and equipment, net		197,000
Van, loan		38,000
Accounts payable			$	69,000
Bakel, loan				28,000
Van, capital				122,000
Bakel, capital				94,000
Cox, capital				78,000
Totals	$	391,000	$	391,000

The partners plan a program of piecemeal conversion of the partnership’s assets to minimize liquidation losses. All available cash, less an amount retained to provide for future expenses, is to be distributed to the partners at the end of each month. A summary of the liquidation transactions follows:

January	Collected $55,000 of the accounts receivable; the balance is deemed uncollectible.
	Received $42,000 for the entire inventory.
	Paid $6,000 in liquidation expenses.
	Paid $62,000 to the outside creditors after offsetting a $7,000 credit memorandum received by the partnership on January 11.
	Retained $14,000 cash in the business at the end of January to cover any unrecorded liabilities and anticipated expenses. The remainder is distributed to the partners.
February	Paid $7,000 in liquidation expenses.
	Retained $2,000 cash in the business at the end of the month to cover unrecorded liabilities and anticipated expenses.
March	Received $150,000 on the sale of all machinery and equipment.
	Paid $9,000 in final liquidation expenses.
	Retained no cash in the business.

Prepare a schedule to compute the safe installment payments made to the partners at the end of each of these three months. (Do not round intermediate calculations.)

Prepare a schedule to compute the safe installment payments made to the partners at the end of January.

Prepare a schedule to compute the safe installment payments made to the partners at the end of February.

Prepare a schedule to compute the safe installment payments made to the partners at the end of March.

Answer 1

Answer:

Schedule to Safe installment payments made to the partners at the end of 31st January:

Schedule to Safe installment payments made to the partners at the end of 28th February:

Schedule to Safe installment payments made to the partners at the end of 31st March: