The following condensed balance sheet is for the partnership of Miller, Tyson, and Watson, who share profits and losses in the ratio of 6:2:2, respectively: $ 54,000 167,000 $ 50,000 75,000 75,000 21,000 Cash Liabilities Miller, capital Tyson, capital Watson, capital Other assets Total Total liabilities and $221,000 $221,000 assets capital a. Assuming no liquidation expenses, calculate the safe payments that can be made to partners at this point in time. b. For how much money must the other assets be sold so that each partner receives some amount of cash in a liquidation?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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The following condensed balance sheet is for the partnership of Miller, Tyson,
and Watson, who share profits and losses in the ratio of 6:2:2, respectively:
$ 50,000
75,000
75,000
21,000
$ 54,000
167,000
Cash
Liabilities
Miller, capital
Tyson, capital
Watson, capital
Other assets
Total
Total liabilities and
$221,000
$221,000
assets
capital
a. Assuming no liquidation expenses, calculate the safe payments that can be
made to partners at this point in time.
b. For how much money must the other assets be sold so that each partner
receives some amount of cash in a liquidation?
Transcribed Image Text:The following condensed balance sheet is for the partnership of Miller, Tyson, and Watson, who share profits and losses in the ratio of 6:2:2, respectively: $ 50,000 75,000 75,000 21,000 $ 54,000 167,000 Cash Liabilities Miller, capital Tyson, capital Watson, capital Other assets Total Total liabilities and $221,000 $221,000 assets capital a. Assuming no liquidation expenses, calculate the safe payments that can be made to partners at this point in time. b. For how much money must the other assets be sold so that each partner receives some amount of cash in a liquidation?
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