Assets
Cash
Adams, Loan
Other Assets
Total Assets
Liabilities and Capital
Liabilities
$ 54,000
12,800
Adams, Capital
228,000
Peters, Capital
Blake, Capital
$ 294,800
Total Liabilities and Equities
$ 46,200
70,400
96,000
82,200
$ 294,800
Liquidation expenses are expected to be negligible. No interest accrues on loans with partners after termination of the business.
Required:
Prepare a cash distribution plan for the APB Partnership. Please follow the practical guidelines when completing this worksheet.
APB PARTNERSHIP
Cash Distribution Plan
Loss Absorption Potential
Adams
Peters
Blake
Capital Accounts
Adams
Peters
Blake
Profit and loss percentages
20%
30%
50%
Preliquidation capital balances
$ 70,400
$ 96,000
$82,200
Loan to Adams
12,800
Total
$ 57,600
$ 96,000
$82,200
Loss absorption potential
Decrease highest LAP to next highest:
$ 0
$ 0
$ 0
$ 57,600
$ 96,000
$82,200
Decrease LAPs to next highest:
$ 0
$ 0
$ 0
$ 57,600
$ 96,000
$82,200
