Determine the amount of cash that should be paid to each partner.

Determine the amount of cash that should be paid to each partner.

Liquidation—Cash distribution computation, safe payments schedule

Fed, Ela, and Luc have decided to liquidate their partnership. Account balances on January 1, 2011, are as follows:

Cash $120,000 Accounts Payable $40,000

Other assets 120,000 Fed capital (30%) 85,000

$240,000 Ela capital (30%) 25,000

Luc capital (40%) 90,000

$240,000

The Partners agree to keep a $10,000 contingency fund and to distribute available cash immediately.

Required: Determine the amount of cash that should be paid to each partner.


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