Question

The balance sheet of Ryan and​ Peter's partnership as of December​ 31, 2018, is given below. Assets    Liabilities Cash $ 19 comma 000   Accounts Payable ​$15,000 Accounts Receivable 12 comma 000   Other liabilities ​25,000 Furniture 25 comma 000 ​ Partners' Equity Equipment 44 comma 000 ​ Ryan, Capital 34 comma 000 Other assets ​8,000 ​ Peter, Capital 34 comma 000 Total assets ​$108 comma 000   Total liabilities and​ partners' equity ​$108 comma 000 Ryan and Peter share profits in the ratio​ 3:2. They liquidate the partnership. The furniture and equipment sold at a loss of $ 51 comma 000. The accounts receivable were collected in full and the other assets were written off as worthless. The cash balance remaining to pay the liabilities is_______________.

Answer 1

$45,000

Step-by-step explanation:

The question is to calculate the remaining cash balance after the payment of liabilities. This is carried out by calculating the book values as follows:

Equipment $40,000

Furniture $25,000

(This represents the book value $65,000

of the total assets sold)

Subtract: Sales Cumulative loss ($51,000)

(This becomes the Cash actually $14,000

received on sales )

Actual Accounts Receivable Cash $12,000

(This becomes the total cash received) $26,000

Add: Existing Cash Balance $19,000

The final cash after liabilities is $45,000