The partnership of Rachel, Adams, and Nixon has the following trial balance on September 30,...
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Accounting
The partnership of Rachel, Adams, and Nixon has the following trial balance on September 30, 20X9:
Debit
Credit
Cash
$ 20,000
Accounts Receivable (net)
30,000
Inventory
35,000
Plant and Equipment (net)
215,000
Accounts Payable
$ 40,000
Rachel, Capital
120,000
Adams, Capital
90,000
Nixon, Capital
50,000
Total
$ 300,000
$ 300,000
The partners share profits and losses as follows: Rachel, 50 percent; Adams, 30 percent; and Nixon, 20 percent. The partners are considering an offer of $180,000 for the accounts receivable, inventory, and plant and equipment as of September 30. The $180,000 will be paid to creditors and the partners in installments, the number and amounts of which are to be negotiated.
Required:
Prepare a cash distribution plan as of September 30, 20X9, showing how much cash each partner will receive if the offer to sell the assets is accepted.
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