This is the post-closing trial balance for JKL Company just prior to liquidation. All balances are normal.
Assets: Cash $16,000; Accounts receivable $35,000; Equipment $86,000; Accumulated Depreciation $52,000.
Liabilities and equity: Accounts payable $43,000; John's Capital $16,000; Kirk's Capital $14,000; Lance's Capital $12,000.
John, Kirk and Lance share profit and loss on a 3:2:3 ratio. Noncash assets were sold for $53,000, the resulting gain or loss was allocated to the partners and the liabilities paid. When the remaining cash is distributed to the partners, John will receive
John will receive $12,000.
To determine how much cash John will receive when the remaining cash is distributed to the partners, we need to calculate the total distribution amount first.
1. Calculate the total capital contributions:
John's Capital: $16,000
Kirk's Capital: $14,000
Lance's Capital: $12,000
Total capital: $16,000 + $14,000 + $12,000 = $42,000
2. Calculate the profit or loss distribution ratio:
John's share: 3/8 (3 out of 8)
Kirk's share: 2/8 (2 out of 8)
Lance's share: 3/8 (3 out of 8)
3. Calculate the profit or loss to be distributed:
Since the trial balance does not provide any profit or loss information, we cannot determine the specific amount to be distributed. If you have the profit or loss information, please provide it, and I can assist you further with the calculations.
Once the profit or loss amount is known, we can calculate the individual distribution amounts for each partner based on their respective ratios.
To determine how much cash John will receive when the remaining cash is distributed to the partners, we need to calculate the distribution of the remaining cash based on the profit and loss sharing ratio.
Given that the profit and loss sharing ratio between John, Kirk, and Lance is 3:2:3, the total ratio is 3+2+3 = 8.
To calculate John's share of the remaining cash, we need to first determine the total amount available to distribute after paying off the liabilities and selling the noncash assets.
Total assets:
Cash: $16,000
Accounts receivable: $35,000
Equipment: $86,000
Accumulated Depreciation: $52,000
Total assets = Cash + Accounts receivable + Equipment - Accumulated Depreciation = $16,000 + $35,000 + $86,000 - $52,000 = $85,000
Total amount available to distribute = Total assets + Amount received from selling noncash assets = $85,000 + $53,000 = $138,000
Next, we need to determine the ratio of John's share in the remaining cash. Since John's share of the profit and loss is 3 out of the total ratio of 8, his share of the remaining cash will be:
John's share of the remaining cash = (John's share of profit and loss / Total ratio) * Total amount available to distribute
John's share of the remaining cash = (3 / 8) * $138,000
John's share of the remaining cash = $51,750
Therefore, John will receive $51,750 when the remaining cash is distributed to the partners.