Problem 4 After 25 years of operations, the Dennison, Edwards, and Smith partnership has decided to liquidate. At that time, 1/1/20x2, the partnership balance sheet is as follows: Dennison, Edwards, and Smith Partners Balance Sheet as of 1/1/20x2 Assets Liabilities and Partners Capital Cash $125,000 Liabilities $80,000 Noncash assets 200,000 Dennison, Capital 140,000 Edwards, Capital 125,000 Smith, Capital (20,000) Total assets $325,000 Total Liabilities & Capital $325,000 In accordance with the Articles of Partnership, the partners agreed to share profits and losses as follows: Dennison, Capital 40% Edwards, Capital 30% Smith, Capital 30% The partnership estimates liquidation expenses of $8,500. Required Before beginning liquidation activities, the partnership agrees that Smith must eliminate her deficit balance. Assuming the noncash assets have zero value, what is the maximum amount she must contribute to the partnership to eliminate the deficit balance in her capital account? Based on the information above, prepare a schedule of safe payments for the partners. Assuming the partnership receives $100,000 for noncash assets and they are ready to finalize their liquidation, prepare a formal Statement of Liquidation for the partnership, in good form. Dennison, Edwards, and Smith Partners Balance Sheet as of 1/1/20x2 Assets Liabilities and Partners Capital Cash $125,000 Liabilities $80,000 Noncash assets 200,000 Dennison, Capital 140,000 Edwards, Capital 125,000 Smith, Capital (20,000) Total assets $325,000 Total Liabilities & Capital $325,000.

1. Problem 4
After 25 years of operations, the Dennison, Edwards, and Smith partnership has decided to
liquidate. At that time, 1/1/20x2, the partnership balance sheet is as follows:
Dennison, Edwards, and Smith Partners
Balance Sheet
as of 1/1/20x2
Assets
Liabilities and Partners Capital
Cash
$125,000
Liabilities
$80,000
Noncash assets
200,000
Dennison, Capital
140,000
Edwards, Capital
125,000
Smith, Capital
(20,000)
Total assets
$325,000
Total Liabilities & Capital
$325,000
In accordance with the Articles of Partnership, the partners agreed to share profits and losses as
follows:
Dennison, Capital
40%
Edwards, Capital

2. 30%
Smith, Capital
30%
The partnership estimates liquidation expenses of $8,500.
Required
Before beginning liquidation activities, the partnership agrees that Smith must eliminate her
deficit balance. Assuming the noncash assets have zero value, what is the maximum amount she
must contribute to the partnership to eliminate the deficit balance in her capital account?
Based on the information above, prepare a schedule of safe payments for the partners.
Assuming the partnership receives $100,000 for noncash assets and they are ready to finalize
their liquidation, prepare a formal Statement of Liquidation for the partnership, in good form.
Dennison, Edwards, and Smith Partners
Balance Sheet
as of 1/1/20x2
Assets
Liabilities and Partners Capital
Cash
$125,000
Liabilities
$80,000
Noncash assets
200,000
Dennison, Capital
140,000
Edwards, Capital
125,000
Smith, Capital
(20,000)
Total assets
$325,000
Total Liabilities & Capital

3. $325,000