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Question Completion:
Condensed Balance Sheet:
Cash $115,000
Other assets 760,000
Total assets $875,000
Accounts payable $232,000
Ferris, loan 43,000
Hardwick, capital 270,000
Saunders, capital 170,000
Ferris, capital 160,000
Total liabilities and capital $875,000
Answer:
The Partnership of Hardwick, Saunders, and Ferris
Proposed Schedule of Liquidation:
Net proceeds from sale of assets $526,000
Share of net proceeds:
Hardwick 4/10 * $526,000 $210,400
Saunders 3/10 * $526,000 $157,800
Ferris 3/10 * $526,000 $157,800 $526,000
Explanation:
a) Data and Calculations:
Condensed Balance Sheet:
Cash $115,000
Other assets 760,000
Total assets $875,000
Accounts payable $232,000
Ferris, loan 43,000
Hardwick, capital 270,000
Saunders, capital 170,000
Ferris, capital 160,000
Total liabilities and capital $875,000
Schedule of Assets Disposal:
Cash $115,000
Other assets:
40% of $760,000 ($304,000) sold for 230,000
60% of $760,000 ($456,000) sold for 456,000
Proceeds from disposal, including cash 801,000
Settlement of Accounts Payable -232,000
Settlement of Ferris, loan -43,000
Net proceeds 526,000
Hardwick Saunders Ferris
Capital accounts $270,000 $170,000 $160,000
Final settlement 210,400 157,800 157,800