Question

The balance sheet of Ryan and​ Peter's partnership as of December​ 31, 2018, is given below. Assets    Liabilities Cash $ 19 comma 000   Accounts Payable ​$15,000 Accounts Receivable 12 comma 000   Other liabilities ​25,000 Furniture 25 comma 000 ​ Partners' Equity Equipment 44 comma 000 ​ Ryan, Capital 34 comma 000 Other assets ​8,000 ​ Peter, Capital 34 comma 000 Total assets ​$108 comma 000   Total liabilities and​ partners' equity ​$108 comma 000 Ryan and Peter share profits in the ratio​ 3:2. They liquidate the partnership. The furniture and equipment sold at a loss of $ 51 comma 000. The accounts receivable were collected in full and the other assets were written off as worthless. The cash balance remaining to pay the liabilities is_______________.

Answer 1

Answer:

$45,000

Explanation:

The question is to calculate the remaining cash balance after the payment of liabilities. This is carried out by calculating the book values as follows:

Equipment                                   $40,000

Furniture                                     $25,000

(This represents the book value                   $65,000

of the total assets sold)

Subtract: Sales Cumulative loss                   ($51,000)

(This becomes the Cash actually                                     $14,000

received on sales )

Actual Accounts Receivable Cash                                   $12,000

(This becomes the total cash received)                            $26,000

Add: Existing Cash Balance                                               $19,000

The final cash after liabilities is                                          $45,000