Question

In: Accounting

The Keller, Long, and Mason partnership had the following balance sheet just before entering liquidation:

The Keller, Long, and Mason partnership had the following balance sheet just before entering liquidation:

Cash

$

115,000


Liabilities

$

45,000

Noncash assets


230,000


Keller, Capital


100,000





Long, Capital


70,000





Mason, Capital


130,000

Total

$

345,000


Total

$

345,000

Keller, Long, and Mason share profits and losses in a ratio of 2:4:4. Assuming noncash assets were sold for $70,000 and liquidation expenses in the amount of $18,500 were incurred, how much will each partner receive in the liquidation?


Keller

Long

Mason

A)

$

14,000


$

28,000


$

28,000


B)

$

37,000


$

74,000


$

74,000


C)

$

63,833


$

0


$

57,667


D)

$

0


$

0


$

121,500


E)

$

57,833


$

12,000


$

51,667



Solutions

Expert Solution








CashNoncash AssetsLiabilitiesKeller (2/10)Long (4/10)Mason (4/10)
Balances before realization1150002300004500010000070000130000
Sale of assets net of liquidation expenses
and division of loss
51500-2300000-35700-71400-71400
Balances after realization16650004500064300-140058600
Payment of liabilities-450000-45000000
Balances after payment of liabilities1215000064300-140058600
Division of Long's deficiency000-4671400-933
Balances1215000063833057667
Cash distributed to partners-12150000-638330-57667














Option C $ 63,833, $0, $57,667 is correct







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