The following condensed balance sheet is for the partnership of Hardwick, Saunders, and Ferris who share profits and losses in the ratio of 4:3:3, respectively. ASSETS LIABILITIES&CAPITAL Accounts Payable Cash 120,000 210,000 50,000 Other Assets 820,000 Loan, Hardwick 40,000 Loan, Ferris Capital, Hardwick 40% 320,000 Capital, Saunders 30% 210,000 190,000 980,000 Capital, Ferris 30% Total 980,000 Total The partners decide to liquidate the partnership. 40% of the Other Assets are sold for $150,000. Prepare a Proposed Schedule of Liquidation at this point in time. Liquidation expenses are projected to be $30,000. 3 4. How should we treat Ferris loan payable on the proposed schedule of liquidation? a. b. c. We should treat Ferris as a creditor for his loan to the partnership. We should treat Ferris' loan to the partnership as an increase to his capital account. We should treat Ferris' loan to the partnership as a reduction of his capital account. 5. Will all the creditors be paid in full at the conclusion of this planned liquidation? a. Yes, all creditors including those related to the liquidating expenses will be i b. Yes, all except the creditors related to the liquidating expenses will be paid in full. c. No, only a limited portion of the outstanding liabilities will be paid. d. No, none of the liabilities will be paid. 6. How much can Hardwick be "safely paid at this point in time? a. Zero b. 12,000 c. 40,000 d. 48,000