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ARAS
On Jan. 3, 2009, the owners of QUAD-A Enterprises decided to dissolve the partnership due to
successive losses during the previous years. Capital balances on Dec 31, 2008 before adjustment:
Allan, 112,000; Adrian, 58,200; Arianne, 75,000; Aleli, 84,400. Withdrawals made by them were
12000, 1500, 3000, 5000 respectively. Adriann made an additional investment in March
amounting to 9200. Their profits and losses ratio is 1:4:1:2. All partners are solvent except for
Aleli. Adrian could only invest more up to 10,000 in case of capital deficiency. Certain amount of
cash is to be withheld for the unpaid and unrecognized liabilities and liquidation expenses.
Partnership assets and liabilities on Jan. 2, 2009
Cash
Inventory, net
Accounts Receivable
Loan to Arianne
Equipment
Liabilities
Loan from Allan
9,000
451,500
245,000
12,000
182,000
????????
20,000
Compute:
1) Amount due to outside creditors before liquidation
2) Full settlement of Adrians interest
3) Cash received by Aleli in January
4) Cash received by Allan in February
5) Cash received by Arianne in March
6) Share of Adrian in the maximum possible loss in January
7) Book value of Equipment sold in January if Aleli received 2000 in February
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8)
9)
10)
11)
12)
13)
14)
15)
Answer key:
1) 594,200
2) 18,275
3) 0
4) 30,050
5) 48,093.75
6) 218,625
7) 199,400
8) 6,231.25
9) 22,537.50
10) (63,250)
11) 103,525
12) 30,000
13) 74,050
14) 206,350
15) 153,500
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