The partnership of Winn, Xie, Yang, and Zed has the following balance sheet: Cash Other assets $ 46,000 285,000 Liabilities Winn, capital (50% of profits and losses) Xie, capital (30%) Yang, capital (10%) Zed, capital (10%) Beginning capital Assumed loss of Schedule 1 Step one balances Assumed loss of Schedule 2 Step two balances Assumed loss of Schedule 3 Step three balances Zed is personally insolvent, and one of his creditors is considering suing the partnership for the $3,000 that is currently owed. The creditor realizes that this litigation could result in partnership liquidation and does not wish to force such an extreme action unless Zed is reasonably sure of obtaining at least $3,000 from the liquidation. Prepare a predistribution plan to determine the amount for which the partnership must sell the other assets to ensure that Zed receives $3,000 from the liquidation. Liquidation expenses are expected to be $31,000.(Do not round intermediate calculations.) $ $ $ Winn 0 $ 0 $ 0 $ Xie 0 $ 0 $ 0 $ Yang 0 $ 0 $ $ 57,000 76,000 96,000 56,000 46,000 0 $ Zed 0 0 0

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The partnership of Winn, Xie, Yang, and Zed has the following balance sheet:
Cash
Other assets
$ 46,000
285,000
Liabilities
Winn, capital (50% of profits and losses)
Xie, capital (30%)
Yang, capital (10%)
Zed, capital (10%)
Zed is personally insolvent, and one of his creditors is considering suing the partnership for the $3,000 that is currently owed. The creditor
realizes that this litigation could result in partnership liquidation and does not wish to force such an extreme action unless Zed is reasonably
sure of obtaining at least $3,000 from the liquidation.
Beginning capital
Assumed loss of Schedule 1
Step one balances
Assumed loss of Schedule 2
Prepare a predistribution plan to determine the amount for which the partnership must sell the other assets to ensure that Zed receives $3,000
from the liquidation. Liquidation expenses are expected to be $31,000. (Do not round intermediate calculations.)
Step two balances
Assumed loss of Schedule 3
Step three balances
$
$
$
Winn
0 $
0 $
0 $
Xie
0 $
0 $
0 $
Yang
0 $
$ 57,000
76,000
96,000
56,000
46,000
0 $
0 $
Zed
0
0
0
Transcribed Image Text:The partnership of Winn, Xie, Yang, and Zed has the following balance sheet: Cash Other assets $ 46,000 285,000 Liabilities Winn, capital (50% of profits and losses) Xie, capital (30%) Yang, capital (10%) Zed, capital (10%) Zed is personally insolvent, and one of his creditors is considering suing the partnership for the $3,000 that is currently owed. The creditor realizes that this litigation could result in partnership liquidation and does not wish to force such an extreme action unless Zed is reasonably sure of obtaining at least $3,000 from the liquidation. Beginning capital Assumed loss of Schedule 1 Step one balances Assumed loss of Schedule 2 Prepare a predistribution plan to determine the amount for which the partnership must sell the other assets to ensure that Zed receives $3,000 from the liquidation. Liquidation expenses are expected to be $31,000. (Do not round intermediate calculations.) Step two balances Assumed loss of Schedule 3 Step three balances $ $ $ Winn 0 $ 0 $ 0 $ Xie 0 $ 0 $ 0 $ Yang 0 $ $ 57,000 76,000 96,000 56,000 46,000 0 $ 0 $ Zed 0 0 0
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