Partners X, Y and Z have capital balances of $80, 000, $180,000 and $60,000 respectively. Immediately prior to liquidation. Total remaining assets have a book value of $320,000 and assume liabilities have been paid. There is one remaining asset with a fair market value of $70,000. All three partners agree to share profit and loss equally. Z wishes to take the asset with him and start a new business and would accept $70,000 in cash; the remaining partners agree this would be fair. How much cash in addition to the asset would first be distributed to Z before any of the other partners receive anything? a. $100,000 b. $240,000 c. $30,000 d. $50,000

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anthougo anthougo · Answer 1 · 2021-12-14T23:55:10+01:00

The cash distributed to Partner Z before the other partners is $60,000.

Data and Calculations:

Book value of assets = $320,000

Fair value of asset = $70,000

X Y Z Total

Capital balances $80,000 $180,000 $60,000 $320,000

Total assets available for distribution $390,000

Assets assumed by Z ($70,000) ($70,000)

Balance $320,000

Distribution to partners $80,000 $180,00 $60,000 $320,000

Cash distribution to partners depends on the cash realized from the assets.

Thus, the cash distributed to Partner Z before the other partners is $60,000.

Learn more about cash distributions to partners upon a partnership liquidation here: https://brainly.com/question/22693552