Answer:
BG Land Development
If partners are to receive the final payment in a lump-sum, when BG Land Development is liquidated, Matthews receives $_50,000__, Mitchell receives $_66,000___, Michaels receives $__14,000__.
Step-by-step explanation:
a) Data and Calculations:
Assets Liabilities and Capital
Cash $20,000 Accounts payable $80,000
Non-cash assets 200,000 Mitchell, Loan 10,000
Matthews, capital 50,000
Mitchell, capital 66,000
Michaels, capital 14,000
Total assets $220,000 Total Liab. and capital $220,000
Totals assets = $220,000
Total liabilities (90,000)
Net assets = $130,000
Partners' capital:
Matthews, capital 50,000
Mitchell, capital 66,000
Michaels, capital 14,000
Total capital = 130,000
b) Each partner is entitled to the ratio of his capital balance or the profit and loss sharing ratio, if any. The net asset is computed by deducting all the liabilities, including one of the partners' loans, from the total value of realizable assets. Ordinarily, partners' loans enjoy priority over capital refund during partnership liquidation.