The partnership of Jenson, Smith and Hart share profits and losses in the ratio of 5:3:2, respectively.
The partners voted to dissolve the partnership when its assets, liabilities, and capitol were as follows:
Cash $30,000
Noncash Assets 250,000
Receivable from Jenson 50,000
Total Assets $330,000
Liabilities $75,000
Payable to Smith 20,000
Jenson Capital 120,000
Smith Capital 85,000
Hart Capital 30,000
Total Liabilities and
Capital $330,000
The partnership will be liquidated over a prolonged period of time. As cash is available it will be distributed to
the partners. The first sale of noncash assets having a book value of $120,000 realized $90,000. How much
cash should be distributed to each partner after this sale? Show all work for the liquidation spreadsheet and the
calculation of the first safe payment.
