The Nice, Rice, and Dice Partnership has not been successful. The partners have determined they must liquidate their partnership. The partners have agreed to liquidate the partnership and anticipate that liquidation expenses will total $1,000. Prior to the liquidation, the partnership balance sheet reflects the following book values:
Cash
$18,000
Noncash assets
51,000
Note receivable-Nice
3,000
Other liabilities
20,000
Capital, Nice
6,000
Capital, Rice
30,000
Capital, Dice
16,000
Profits and losses are shared 45% to Nice, 35% to Rice, and 20% to Dice. A review of the individual partner's personal net worth reveals the following:
Assets
Liabilities
Nice
165,000
162,000
Rice
200,000
110,000
Dice
185,000
90,000
The following transactions occur:
a.
Assets having a book value of $40,000 are sold for $22,000 cash
b.
Liabilities are paid, where possible
c.
Partners contribute from their personal net worth, according to RUPA requirements
Required:
Prepare liquidation schedule and determine how the available assets will be distributed using a schedule of safe payments. Â Â
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