Assume that noncash assets were sold for $58,000 and liquidation expenses in the amount of $10,000 were incurred.If Lewis was personally insolvent and could not contribute any assets to the partnership, and Keaton and Meador were both solvent, what amount of cash would Keaton receive from the distribution of partnership assets?

Question

Quizplus · Accepted Answer

The total cash available after selling noncash assets and paying liquidation expenses is $48,000 ($58,000 - $10,000). If Lewis is insolvent and cannot contribute, the remaining cash is distributed to the solvent partners, Keaton and Meador, according to their partnership agreement or capital balances. Assuming equal distribution, Keaton would receive $24,000. However, without specific capital balances or distribution ratios, the exact amount cannot be determined beyond the available cash.

Assume That Noncash Assets Were Sold for $58,000 and Liquidation