The following condensed balance sheet is presented for the partnership of Archer, Bows, and Cross, who share profits and losses in the ratio 6:3:1, respectively:
Bows paid $30,000 to creditors out of her own personal funds-this has not been reflected in the above balance sheet. Archer is personally solvent but temporarily not liquid. The partners decide to liquidate the partnership. The first sale of noncash assets having a book value of $140,000 realizes $120,000.
Required:
How should the available cash be distributed?

Question

The following condensed balance sheet is presented for the partnership of Archer, Bows, and Cross, who share profits and losses in the ratio 6:3:1, respectively:
  Bows paid $30,000 to creditors out of her own personal funds-this has not been reflected in the above balance sheet. Archer is personally solvent but temporarily not liquid. The partners decide to liquidate the partnership. The first sale of noncash assets having a book value of $140,000 realizes $120,000.
Required:
How should the available cash be distributed?

Quizplus · Accepted Answer

The Answer of The following condensed balance sheet is presented for the partnership of Archer, Bows, and Cross, who share profits and losses in the ratio 6:3:1, respectively:
  Bows paid $30,000 to creditors out of her own personal funds-this has not been reflected in the above balance sheet. Archer is personally solvent but temporarily not liquid. The partners decide to liquidate the partnership. The first sale of noncash assets having a book value of $140,000 realizes $120,000.
Required:
How should the available cash be distributed?

The Following Condensed Balance Sheet Is Presented for the Partnership