Reference no: EM132764735
Question: AK, BS and CM are partners in a business being liquidated. The partnership has cash of 132,000 non- cash assets with a book value of 1,584,000 and liabilities of 1,039,500. The following data relate to the partners as of June 1, 2013: AK has capital balance of 775,500, personal assets of 165,000 and personal liabilities of 82,500. BS extended a loan to the partnership in the amount of 82,500, capital deficit of 231,000, personal assets of 247,500 and personal liabilities of 99,000. CM has a capital balance of 49,500, personal assets of 412,500 and personal liabilities of 247,500. Their profit and loss ratio is 1:3:1, BS,AK and CM, respectively.
On June 12, 2013, assets with a book value of 495,000 were sold for 330,000 cash. The proceeds were used to pay off liabilities of the partnership. During the remainder of June, no additional assets were realized and outside creditors began to pressure the partnership for payment. On July 3, the partners agreed to contribute personal assets, to whatever extent possible, in order to eliminate their respective deficits. Shortly thereafter, assets with a book value of 330,000 and fair value of 379,500 were distributed to AK. Assuming additional non-cash assets with book value of 660,000 were sold in July for 891,000.
How much cash would be distributed to CM?
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