Simple liquidation—Schedule of cash available
The partnership of Folly and Frill is in the process of liquidation. On January 1, 2011, the ledger shows account balances as follows:
|
Cash |
$10,000 |
Accounts payable |
$15,000 |
|
Accounts receivable |
25,000 |
Folly capital |
40,000 |
|
Lumber inventory |
40,000 |
Frill capital |
20,000 |
$21,000 are collected. No further collections on the receivables are expected. Profits are shared 60 percent to Folly and 40 percent to Frill.
REQUIRED: Prepare a schedule showing how the cash available on February 1, 2011, should be distributed.