Partners Dennis and Lilly have decided to liquidate their business.The following information is available:
Dennis and Lilly share profits and losses in a 3:2 ratio.During the first month of liquidation,half the inventory is sold for $60,000,and $60,000 of the accounts payable is paid.During the second month,the rest of the inventory is sold for $45,000,and the remaining accounts payable are paid.Cash is distributed at the end of each month,and the liquidation is completed at the end of the second month.
-Refer to the information provided above.Using a safe payments schedule,how much cash will be distributed to Lilly at the end of the first month?

Question

Partners Dennis and Lilly have decided to liquidate their business.The following information is available:
  Dennis and Lilly share profits and losses in a 3:2 ratio.During the first month of liquidation,half the inventory is sold for $60,000,and $60,000 of the accounts payable is paid.During the second month,the rest of the inventory is sold for $45,000,and the remaining accounts payable are paid.Cash is distributed at the end of each month,and the liquidation is completed at the end of the second month.
-Refer to the information provided above.Using a safe payments schedule,how much cash will be distributed to Lilly at the end of the first month?

Quizplus · Accepted Answer

Lilly will receive $24,000 at the end of the first month because the safe payments schedule states that she will receive 40% of the total contract price ($60,000) at the end of the first month.

Partners Dennis and Lilly Have Decided to Liquidate Their Business