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The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to liquidation:

Cash	$	40,000	Liabilities	$	47,500
Noncash assets		224,000	Drysdale, loan		18,500
			Drysdale, capital (50%)		76,000
			Koufax, capital (30%)		66,000
			Marichal, capital (20%)		56,000

1. a-1. Determine the maximum loss that can be absorbed in Step 1. Then, assuming that this loss has been incurred, determine the next maximum loss that can be absorbed in Step 2.
2. a-2. Liquidation expenses are estimated to be $19,000. Prepare a predistribution schedule to guide the distribution of cash. Further, modify the tags in explanation as well.
3. b. Assume that assets costing $78,000 are sold for $62,000. How is the available cash to be divided?

Req A1 Req A2 Req B Determine the maximum loss that can be absorbed in Step 1. Then, assuming that t the next maximum loss that can be absorbed in Step 2. Partner Capital Balance Loss Allocation Maximum Loss That Can Be Absorbed Step 1 Drysdale Koufax 50 % $ $ $ $ 94,500 66,000 30 56,000 20 >>> % $ 189,000 220,000 280,000 % $ Marichal Step 2 Koufax Marichal $ $ $ 9,300 60 27,500 X 40 % % 15,500 68,750 X $ Req A1 Req A2 ReqB Liquidation expenses are estimated to be $19,000. Prepare a predistribution schedule to guid Further, modify the tags in explanation as well. First DRYSDALE, KOUFAX, AND MARICHAL Distribution of Available Cash $ 66,500 Liabilities $ 47,500 Liquidation expenses 19,000 21,300 X Drysdale x 21,300 X % 15,500 Koufax 9,300 X % Drysdale 6,200 X % Next Next All remaining cash % % % Req A1 Req B > Complete this question by entering your answers in the tabs below. Req A1 Req A2 ReqB Assume that assets costing $78,000 are sold for $62,000. How is the available cash to be divide Cash available for distribution: Beginning cash balance Sale of noncash assets Subtotal Payment of liabilities Payment of estimated liquidation expenses Cash available for distribution $ 40,000 62,000 $ 102,000 (47,500) (19,000) $ 35,500 Koufax Cash distribution to partners: Drysdale First $ 21,300 X Next 14,200 X Next Total $ 35,500 Marichal Total $ 21,300 X $ 42,600 X 8,250 X 22,450 X 5,680 X 5,680 X $ 35,230 $ 70,730 $ 0 Reg A2 RegB >

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