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prepare a schedule to compute the safe installment payments made to the partners at 593703

On January 1, the partners of Van, Bakel, and Cox (who share profits and losses in the ratio of 5:3:2, respectively) decide to liquidate their partnership. The trial balance at this date follows:

Debit

Credit

Cash

$18,000

Accounts receivable

66,000

Inventory

52,000

Machinery and equipment, net

189,000

Van, loan

30,000

Accounts payable

$53,000

Bakel, loan

20,000

Van, capital

118,000

Bakel, capital

90,000

Cox, capital

74,000

Totals

$355,000

$355,000

The partners plan a program of piecemeal conversion of the business’s assets to minimize liquidation losses. All available cash, less an amount retained to provide for future expenses, is to be distributed to the partners at the end of each month. A summary of the liquidation transactions follows:

January

Collected $51,000 of the accounts receivable; the balance is deemed

Received $38,000 for the entire inventory.

Paid $2,000 in liquidation expenses.

Paid $50,000 to the outside creditors after offsetting a $3,000 credit memorandum received by the partnership on January 11.

Retained $10,000 cash in the business at the end of January to cover any

unrecorded liabilities and anticipated expenses. The remainder is distributed to

the partners.

February

Paid $3,000 in liquidation expenses.

Retained $6,000 cash in the business at the end of the month to cover

unrecorded liabilities and anticipated expenses.

March

Received $146,000 on the sale of all machinery and equipment.

Paid $5,000 in final liquidation expenses.

Retained no cash in the business.

Prepare a schedule to compute the safe installment payments made to the partners at the end of each of these three months.

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