2022January 1- The partners decide to liquidate the partnership. They have the following balances:Cash $93,667Accounts Receivable $4 500Equipment $ 46,250Accumulated Depreciation $ 25 000Accounts Payable $4417The partners were able to collect $3 500 of the accounts receivable and sell the equipment for $57,250a) Record all journal entries to dissolve the partnership in the following order.i) Record the collection of the A/R and sale of the equipment. You need to close out the A/R, Equipmentand Accumulated Amortization Accounts. There will be either a Gain on Disposal or Loss onDisposal of Assets account needed to balance the journal entry.ii) Allocate the Gain or Loss on Disposal to the two partners capital accounts.iii) Pay off any outstanding liabilities.iv) Pay out the Capital balances to the remaining partners from the Bank account.Do the balance sheet on the left to help you determine the new Bank balanceand the final Capital balances. Jan202211Balance SheetAssetsCashEquipmentAccumulated AmortizationA/RLiabilities & EquityAccounts PayableBrady, CapitalMcNabb, CapitalBefore LiqAfter Liq

Partnership: Partnership is a form of business organization in which two or more than two…

2022 January 1-The partners decide to liquidate the partnership. They have the following balances: Cash $93,667 Accounts Receivable $4 500 Equipment $ 46,250 Accumulated Depreciation $ 25 000 Accounts Payable $4417 The partners were able to collect $3 500 of the accounts receivable and sell the equipment for $57,250

2022 January 1-The partners decide to liquidate the partnership. They have the following balances: Cash $93,667 Accounts Receivable $4 500 Equipment $ 46,250 Accumulated Depreciation $ 25 000 Accounts Payable $4417 The partners were able to collect $3 500 of the accounts receivable and sell the equipment for $57,250

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Question #7: Due to the fact that the partnership had been unprofitable for the past several years,…

A: Net Worth A person's or company's net worth is the value of their assets less the amount of…

Q: L, M, and N are in the process of liquidating their partnership. Since it may take several months to…

A: Safe Payment Schedule - It is schedule which will used in installment liquidation which shows the…

Q: Lauren's basis in Driftwood Partnership is $635,000. Driftwood distributes all the land to Lauren in…

A: If Driftwood does not have a 754 election in effect at the time of distribution, Driftwood will have…

Q: Prepare a statement of realization and liquidation for the CDG Partnership on December 10, 20X6.(Do…

A: The realization and liquidation statement is prepared in which the assets and payments made is…

Q: On December 31st 2022 the partnership of Pelosi, Trump, Schiff, and DeSantis (PTSD) have the…

A: A partnership is a form of business where two or more people undertake a venture for the common…

Q: he balance sheet of the Troy Partnership at September 30, 2020, shows: Va Various Assets 500,000…

Q: Bing and Bingo decided to dissolve and liquidate the partnership on June 16, 2020. On that date, the…

A: partnership is a such form of business where more than one person come together in order to share…

Q: Rich and Poore have partnership capital balances of $ 160,000 and $ 120,000, respectively. Poore…

A: The partnership comes into existence when two or more persons agree to do the business and share the…

Q: Edward Chance sold his 1/3 interest in CCS Partnership to Greg Randall for $112,000 cash on January…

A: When you sale the assets that you have or hold some time ago and than later on you sold the interest…

Q: Take me to the text Pablo, Keith, and Normand operate a small law firm under a limited liability…

A: Liquidation of partnership means where the assets of the partners are sold out and payment are made…

Q: 1. FORMATION> Abe and Babe decide to form a partnership on Jan. 1, 1999. From their own businesses…

A: A Partnership is a type of business entity where 2 or more persons come together as partners to do…

Q: Account balances December 31, 2023 Due to several unprofitable periods, the partners decided to…

A: A Partnership Firm comes into existence when two or more persons agree to do the business and share…

Q: Tony, Mary, and Tegan are partners with capital balances of $200,000, $120,000, and $120,000,…

A: Partnership A partnership is a type of business where two or more people formally agree to be…

Q: Martha Wheaton, Bess Chen, and Sam Smith were partners in an urban Calgary tea shop called Wake and…

A: The partnership comes into existence when two or more persons agree to do the business and further…

Q: The END. partnership has the following capital balances as of the end of the current year: Pineda…

A: The bonus method is used to give additional capital to a new partner in a partnership when the…

Q: The E.N.D. partnership has the following capital balances as of the end of the current year: Pineda…

A: Partnership is the association of two or more persons who have agreed to share profit and losses in…

Q: avid Wallace, Olena Dunn, and Danny Lin were partners in a commercial architect firm and showed the…

A: Journal Entry is the primary step to record the transaction in the books of accounts.The increase in…

Q: LO of estion L, M, and N are in the process of liquidating their partnership. Since it may take…

A: The balance sheet outlines the assets and liabilities at the end of the financial year while the…

Question

2022
January 1- The partners decide to liquidate the partnership. They have the following balances:
Cash $93,667
Accounts Receivable $4 500
Equipment $ 46,250
Accumulated Depreciation $ 25 000
Accounts Payable $4417
The partners were able to collect $3 500 of the accounts receivable and sell the equipment for $57,250
a) Record all journal entries to dissolve the partnership in the following order.
i) Record the collection of the A/R and sale of the equipment. You need to close out the A/R, Equipment
and Accumulated Amortization Accounts. There will be either a Gain on Disposal or Loss on
Disposal of Assets account needed to balance the journal entry.
ii) Allocate the Gain or Loss on Disposal to the two partners capital accounts.
iii) Pay off any outstanding liabilities.
iv) Pay out the Capital balances to the remaining partners from the Bank account.
Do the balance sheet on the left to help you determine the new Bank balance
and the final Capital balances.

Jan
2022
11
Balance Sheet
Assets
Cash
Equipment
Accumulated Amortization
A/R
Liabilities & Equity
Accounts Payable
Brady, Capital
McNabb, Capital
Before Liq
After Liq

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Step 5

Step 6

Step by step

Solved in 6 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

55
The E.N.D. partnership has the following capital balances as of the end of the current year: $ 280,000 240,000 210,000 190,000 $ 920,000 Pineda Adams Fergie Gomez Total capital Answer each of the following independent questions: a. Assume that the partners share profits and losses 3:3:2:2, respectively. Fergie retires and is paid $262,000 based on the terms of the original partnership agreement. If the goodwill method is used, what is the capital balance of the remaining three partners? b. Assume that the partners share profits and losses 4:3:2:1, respectively. Pineda retires and is paid $305,000 based on the terms of the original partnership agreement. If the bonus method is used, what is the capital balance of the remaining three partners? (Do not round your intermediate calculations. Round your final answers to the nearest dollar amounts.) Capital Balance a. Pineda Adams Gomez b. Adams Fergie Gomez
5 A, B and C are partners. On January 2, 2020, their capital balances and profit and loss ratio are as follows: ` Capital P&L ratio A P625,000 60% B 1,250,000 25% C 1,500,000 15% C withdrew P250,000 during the year. Net loss on December 31, 2020 totaled P500,000. Hence, the partners decided to liquidate the partnership. It is uncertain how much of the assets will ultimately yield but the favorable realization is expected. It is, therefore, agreed to distribute cash as it becomes available. There are unpaid liabilities of P125,000 and cash of P17,500. 1. The amount of non-cash assets before liquidation is: _______ 2. The amount to be realized by the partnership on the sale of its assets so that A will receive a total of P475,000 in the final settlement of his interest is: __________
Activity 4: On January 2, 2020, Jenny and Kenny formed a partnership. The following assets were contributed by each of the partners: LOUKS UN Kenny P 60,000 10,000 180,000 Jenny 40.000 Cash Inventory Equipment 60,000 The equipment of Kenny is subject to a mortgage of P50,000 which the partnership has assumed. The partnership agreement specifies that each partner receives 10% interest on her beginning capital balance. Jenny receives an annual salary of P15,000; Kenny receives an annual salary of P20,000. The remaining profit or loss is divided using 2:3 ratio with 2 parts assigned to Jenny and 3 parts assigned to Kenny. During 2020, the partnership had an income of P185,000. Assume there were no drawings during 2020. On January 2, 2021, Jenny and Kenny decide to admit a new partner, Lenny, for a 1/6 interest in the firm for P175,000. The bonus method is used to record the admission of the new partner. After admitting the new partner the partnership agreement is amended as follows: Each…
The SSC, a cash-method partnership, has a balance sheet that includes the following assets on December 31 of the current year: Basis FMV $ 180,000 $ 180,000 0 Cash Accounts receivable 60,000 120,000 $ 270,000 $360,000 Susan, a one-third partner, has an adjusted basis of $90,000 for her partnership interest. If Susan sells her entire partnership interest to Emma for $100,000 cash, what is the amount and character of Susan's gain or loss from the sale? Group of answer choices $10,000 capital gain $10,000 ordinary income $20,000 ordinary income; $10,000 capital gain $10,000 capital loss; $20,000 ordinary income Land Total 90,000
2017January 1 – The partners decide to liquidate the partnership. They have the following balances:Cash $90,000Accounts Receivable $6500Equipment $ 120000Accumulated Depreciation $ 35000Accounts Payable $ 6500The partners were able to collect $9500 of the accounts receivable and sell the equipment for $79000. a) Record all journal entries to dissolve the partnership.