The ABC partnership reports the following condensed balance sheet: Cash...
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Accounting
The ABC partnership reports the following condensed balance sheet:
Cash
$2,020,000
Liabilities $1,800,000
Noncash assets
3,670,000
Partner A, capital
1,750,500
Partner B, capital 1,750,500
Partner C, capital
389,000
Total assets
$5,690,000
Total liabilities and partner capital
$5,690,000
The partners wish to liquidate the partnership. The noncash assets are sold for $2,500,000 with the loss distributed to the partners in the ratio of 30%/30%/40% to partner A, B, and C, respectively. The liabilities are paid in full. Partners make any capital contribution that is necessary to offset a negative balance in their respective Capital Accounts.
Required: Prepare a schedule detailing the liquidation of the assets, repayment of the liabilities, and distribution of the remaining cash to the partners.
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