Question

In: Accounting

The partnership of Anderson, Berry, Hammond, and Winwood is being liquidated. It currently holds cash of...

The partnership of Anderson, Berry, Hammond, and Winwood is being liquidated. It currently holds cash of $21,200 but no other assets. Liabilities amount to $32,500. The capital balances are

Anderson (40% of profits and losses) $ 38,700

Berry (30%) 27,000

Hammond (10%) (36,000 ) (deficit)

Winwood (20%) (41,000 ) (deficit)

a. If both Hammond and Winwood are personally insolvent, how much money must Berry contribute to this partnership?

b-1. If only Winwood is personally insolvent, how much money must Hammond contribute?

b-2. If only Winwood is personally insolvent, how will Hammond's contribution (funds) be disbursed?

c. If only Hammond is personally insolvent, how much money should Anderson receive from the liquidation?

Solutions

Expert Solution

Answer -

A)

Amount- Debit/(credit)
Particular cash liability anderson Berry hammond winwood
Opening balance 21200 -32500 -38700 -27000 36000 41000
Payment of liabilities -21200 21200
Balance 0 -11300 -38700 -27000 36000 41000
Hammond and winwood allocation(4:3) 0 0 44000 33000 -36000 -41000
Balance 0 -11300 5300 6000 0 0

Berry has to contribute $6000

B-1)

Paticular cash liability anderson berry hammond winwood
Opening balance 21200 -32500 -38700 -27000 36000 41000
Payment of liabilities -21200 21200
Balance 0 -11300 -38700 -27000 36000 41000
Winwood allocation(4:3:1) 0 0 20500 15375 5125 -41000
Balance 0 -11300 -18200 -11625 41125 0

Hammond contribution = $41125

B-2)

Out of the hammond contribution of $41125 the amount disbursed to:

1) creditore = $11300

2) anderson = $18200

3) berry = $11625

C)

Particular cash liability anderson berry Hammond winwood
Op. Balance 21200 -32500 -38700 -27000 36000 41000
Payment of liabilities -21200 21200
Balance 0 -11300 -38700 -27000 36000 41000
Hammond allocation(4:3:2) 0 0 16000 12000 -36000 8000
Balance 0 -11300 -22700 -15000 0 49000

Anderson will receive $22700 from liquidation.

ekkarill92 answered 3 years ago
Next > < Previous

Related Solutions

The partnership of Anderson, Berry, Hammond, and Winwood is being liquidated. It currently holds cash of...
The partnership of Anderson, Berry, Hammond, and Winwood is being liquidated. It currently holds cash of $22,900 but no other assets. Liabilities amount to $36,600. The capital balances are Anderson (30% of profits and losses) $ 14,300 Berry (30%) 26,000 Hammond (20%) (22,000 ) (deficit) Winwood (20%) (32,000 ) (deficit) a. If both Hammond and Winwood are personally insolvent, how much money must Berry contribute to this partnership? b-1. If only Winwood is personally insolvent, how much money must Hammond...
The partnership of Anderson, Berry, Hammond, and Winwood is being liquidated. It currently holds cash of...
The partnership of Anderson, Berry, Hammond, and Winwood is being liquidated. It currently holds cash of $21,200 but no other assets. Liabilities amount to $32,500. The capital balances are Anderson (40% of profits and losses) $ 38,700 Berry (30%) 27,000 Hammond (10%) (36,000 ) (deficit) Winwood (20%) (41,000 ) (deficit) a. If both Hammond and Winwood are personally insolvent, how much money must Berry contribute to this partnership? b-1. If only Winwood is personally insolvent, how much money must Hammond...
Anderson (40% of profits and losses) $ 40,900 Berry (10%) 12,000 Hammond (20%) (38,000 ) (deficit)...
Anderson (40% of profits and losses) $ 40,900 Berry (10%) 12,000 Hammond (20%) (38,000 ) (deficit) Winwood (30%) (42,000 ) (deficit) a. If both Hammond and Winwood are personally insolvent, how much money must Berry contribute to this partnership? b-1. If only Winwood is personally insolvent, how much money must Hammond contribute? b-2. If only Winwood is personally insolvent, how will Hammond's contribution (funds) be disbursed? c. If only Hammond is personally insolvent, how much money should Anderson receive from...
A partnership currently holds three assets: cash, $10,000; land, $35,000; and a building, $50,000. The partnership...
A partnership currently holds three assets: cash, $10,000; land, $35,000; and a building, $50,000. The partnership has no liabilities. The partners anticipate that expenses required to liquidate their partnership will amount to $5,000. Capital balances are as follows: The partners share profits and losses as follows: Ace (30 percent), Ball (30 percent), Eaton (20 percent), and Lake (20 percent). If a preliminary distribution of cash is to be made, what is the amount of safe payment that can be made...
The partnership of Duro, Kemp and Roth is to be liquidated as soon as possible after...
The partnership of Duro, Kemp and Roth is to be liquidated as soon as possible after December 31, 2016. All cash on hand except for a $20,000 contingency balance is to be distributed at the end of each month until the liquidation is completed. Profits and losses are shared 50%, 30% and 20% by Duro, Kemp and Roth, respectively. The partnership balance sheet at December 31, 2006 contains the following. Assets                                                             Liabilities and Capital Cash                                        240,000            Accounts payable                  300,000...
A local partnership is to be liquidated. Commissions and other liquidation expenses are expected to total...
A local partnership is to be liquidated. Commissions and other liquidation expenses are expected to total $19,000. The business’s balance sheet prior to the commencement of liquidation is as follows: Cash $ 27,000 Liabilities $ 40,000 Noncash assets 254,000 Simpson, capital (20%) 18,000 Hart, capital (40%) 40,000 Bobb, capital (20%) 48,000 Reidl, capital (20%) 135,000 Total assets $ 281,000 Total liabilities and capital $ 281,000 Prepare a predistribution plan for this partnership.
AB Accounting LLP currently has two partners, Carol Anderson and Cathy Burns. Anderson currently has a...
AB Accounting LLP currently has two partners, Carol Anderson and Cathy Burns. Anderson currently has a capital account balance, at book value, of $150,000. Anderson receives 70% of the profits and losses of the partnership. Burns currently has a capital account balance, at book value, of $80,000. Burns receives 30% of the profits and losses of the partnership. The partners believe that the fair market value of several assets are different than the book values. The assets include: 1) The...
A wealthy investor holds $700,000 worth of U.S. Treasury bonds. These bonds are currently being quoted...
A wealthy investor holds $700,000 worth of U.S. Treasury bonds. These bonds are currently being quoted at 105105 % of par. The investor is concerned, however, that rates are headed up over the next six months, and he would like to do something to protect this bond portfolio. His broker advises him to set up a hedge using T-bond futures contracts. Assume these contracts are now trading at 110 -12. a. Briefly describe how the investor would set up this...
A wealthy investor holds ​$600,000 worth of U.S. Treasury bonds. These bonds are currently being quoted...
A wealthy investor holds ​$600,000 worth of U.S. Treasury bonds. These bonds are currently being quoted at 107​% of par. The investor is​ concerned, however, that rates are headed up over the next six​ months, and he would like to do something to protect this bond portfolio. His broker advises him to set up a hedge using​T-bond futures contracts. Assume these contracts are now trading at 111​-00 a. Briefly describe how the investor would set up this hedge. Would he...
A local dental partnership has been liquidated and the final capital balances are as follows:
A local dental partnership has been liquidated and the final capital balances are as follows: Atkinson, capital (40% of all profits and losses)        $ 73,000Kaporale, capital (30%)                                           33,080Dennsmore, capital (20%)                                       (48,000)Rasputin, capital (10%)               ...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT