The balance sheet for the Delphine, Xavier, and Olivier partnership follows: Cash . . . . . . . . . . . . . . . . . . . $ 60,000 Liabilities . . . . . . . . . . . . . . . $ 40,000Noncash assets . . . . . . . . . 100,000 Delphine, capital . . . . . . . . .. 60,000Xavier, capital . . . . . . . . . . . 40,000Olivier, capital . . . . . . . . . . . 20,000 Delphine, Xavier, and Olivier share profits and losses in the ratio of 4:4:2, respectively. The partners have agreed to terminate the business and estimate that $12,000 in liquidation expenses will be incurred.a. What is the amount of cash that safely can be paid to partners prior to liquidation of noncash assets?b. How should the safe amount of cash determined in (a) be distributed to the partners?
The balance sheet for the Delphine, Xavier, and Olivier
Cash . . . . . . . . . . . . . . . . . . . $ 60,000 Liabilities . . . . . . . . . . . . . . . $ 40,000
Noncash assets . . . . . . . . . 100,000 Delphine, capital . . . . . . . . .. 60,000
Xavier, capital . . . . . . . . . . . 40,000
Olivier, capital . . . . . . . . . . . 20,000
Delphine, Xavier, and Olivier share
a. What is the amount of cash that safely can be paid to partners prior to liquidation of noncash assets?
b. How should the safe amount of cash determined in (a) be distributed to the partners?
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