Question
In: Accounting
The following condensed balance sheet is for the partnership ofMiller, Tyson, and Watson, who share...
The following condensed balance sheet is for the partnership of Miller, Tyson, and Watson, who share profits and losses in the ratio of 6:2:2, respectively: |
| Cash | $ 48,000 | Liabilities | $ 46,000 | |
| Other assets | 148,000 | Miller, capital | 66,000 | |
| Tyson, capital | 66,000 | |||
| Watson, capital | 18,000 | |||
| Total assets | $196,000 | Total liabilities and capital | $196,000 | |
For how much money must the other assets be sold so that each partner receives some amount of cash in a liquidation? |
Solutions
Expert Solution
Now,
Loss to eliminate the capital:
For Miller = 66000/0.6 = 110,000
For Tyson = 66000/0.2 = 330,000
For Watson = 18000/0.2 = 90,000
So, if loss is less than 90000, then all three will receive some cash.
So, the other assets, which is priced at 148,000 should be sold for 148000-90000 = 58000 to make sure every partner get some cash.
ekkarill92 answered 2 years agoRelated Solutions
The following condensed balance sheet is for the partnership of Miller, Tyson, and Watson, who share...
The following condensed balance sheet is for the partnership of
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Liabilities
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=======
=======
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