60.1K

Verified Solution

Link Copied!

Adams, Peters, and Blake share profits and losses for their APB Partnership in a ratio of 2:3:5. When they decide to liquidate, the balance sheet is as follows:

Assets		Liabilities and Capital
Cash	$ 36,000	Liabilities	$ 73,700
Adams, Loan	13,800	Adams, Capital	53,400
Other Assets	215,000	Peters, Capital	70,500
		Blake, Capital	67,200
Total Assets	$ 264,800	Total Liabilities and Equities	$ 264,800

Liquidation expenses are expected to be negligible. No interest accrues on loans with partners after termination of the business.

Required:

Prepare a cash distribution plan for the APB Partnership. Please follow the practical guidelines when completing this worksheet.

	APB PARTNERSHIP Cash Distribution Plan Loss Absorption Potential Capital Accounts Adams Peters Blake Adams Peters Blake Profit and loss percentages % % % Preliquidation capital balances Loan to Adams Total $0 $0 $0 Loss absorption potential Decrease highest LAP to next highest: $0 $0 $0 $0 $0 $0 Decrease LAPs to next highest: $0 $0 $0 $0 $0 $0

Answer & Explanation Solved by verified expert

See Answer