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
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.