At the end of the year, Emily has retired from the partnership, and Frank has joined it. However, the partnership is not going well. Leeds, Richard, and Frank have decided to liquidate the partnership. Frank is a little concerned. While Leeds has plenty of money, Richard is personally insolvent. The partnership sells the apartment building for $165,000, which is a loss from its book value of $189,000.
Capital Capital Capital
Cash Assets Liabilities Leed Richard Frank Total
percent 40% 30% 30%
Balances $2,000 $189,000 ($80,000) ($64,000) ($5,000) ($42,000) $0
Using these balances:
• In an Excel worksheet show the
o sale of the apartment building.
o payment of liabilities.
o payments to the partners in liquidation of the partnership.
• In the memo, accurately assess Richard’s status in relation to the other partners.