Chapter 164. The partnership of Xavier, Yarnell and Zablicki have decided to liquidate their partnership. At thetime, the partners share income and loss in the ratio of 2:2:6. No partner can make any payments intothe partnership. The partnership sold the noncash assets for $20,000.A. Complete the liquidation schedule belowMarshalling of Assets - Simple LiquidationNoncashY,Beginning balancesSell noncash assetsPay creditorsOffset loanAllocated deficitBeginning balancesSell noncash assetsPay creditorsPayment to partnersB. Now assume the noncash assets were sold for $16,000. Complete the liquidation schedule belowMarshalling of Assets - Simple LiquidationOffset loanAllocated deficitCashAssets Liabilities$5,000 $40,000 $15,000Payment to partnersCash$5,000NoncashAssets$40,000XY,LoanCapital Capital$2,000 $12,000$1,000Liabilities$15,000Y,LoanX₂Capital$2,000 $12,000Y,CapitalZ₂Capital$15,000$1,000Z,Capital$15,000 The MDS partnership has decided to liquidate. At the time, the profit and loss ratios for Murphy,Donnelly and Sullivan were 1:1:3. The balance sheet is below.LiabilitiesM, CapitalD, CapitalS, CapitalCashOther assetsCapitalP & L ratioLAP (capital/P&L)C. Using the loss absorption potential system, determine how the partners will share in the distributionof cashLoss Absorption PotentialMDP & L ratioLAPNet capital interestDistribution to D(100 × 0.2)$ 30,000170,000Distribution to M & D(150 × 0.2)$200.000Order of cash distributionD. Prepare an advance plan for the distribution of cashSLoss Absorption PotentialMDSAdvance Cash Distribution PlanLiabilitiesMM$ 20,00050,00070,00060.000$200.000DAsset DistributionSS

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4. The partnership of Xavier, Yarnell and Zablicki have decided to liquidate their partnership. At the time, the partners share income and loss in the ratio of 2:2:6. No partner can make any payments into the partnership. The partnership sold the noncash assets for $20,000. A. Complete the liquidation schedule below Marshalling of Assets - Simple Liquidation Noncash Assets Beginning balances Sell noncash assets Pay creditors Offset loan Allocated deficit Cash Liabilities $5,000 $40,000 $15,000 Payment to partners B. Now assume the noncash assets were sold for $16,000. Complete the liquidation schedule below Mar X₂ Y, Z, Loan Capital Capital Capital $2,000 $12,000 $1,000 $15,000 1.

4. The partnership of Xavier, Yarnell and Zablicki have decided to liquidate their partnership. At the time, the partners share income and loss in the ratio of 2:2:6. No partner can make any payments into the partnership. The partnership sold the noncash assets for $20,000. A. Complete the liquidation schedule below Marshalling of Assets - Simple Liquidation Noncash Assets Beginning balances Sell noncash assets Pay creditors Offset loan Allocated deficit Cash Liabilities $5,000 $40,000 $15,000 Payment to partners B. Now assume the noncash assets were sold for $16,000. Complete the liquidation schedule below Mar X₂ Y, Z, Loan Capital Capital Capital $2,000 $12,000 $1,000 $15,000 1.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Liquidating Partnerships Prior to liquidating their partnership, Fowler and Ericson had capital accounts of $26,000 and $51,000, respectively. Prior to liquidation, the partnership had no cash assets other than what was realized from the sale of assets. These partnership assets were sold for $93,000. The partnership had $4,000 of liabilities. Fowler and Ericson share income and losses equally. Determine the amount received by Fowler as a final distribution from liquidation of the partnership.$fill in the blank 1
The following account balances were available for the Perry, Quincy, and Renquist partnership just before it entered liquidation: Cash $ 90,000 Liabilities $ 170,000 Noncash assets 300,000 Perry, capital 70,000 Quincy, capital 50,000 Renquist, capital 100,000 Total $ 390,000 Total $ 390,000 Included in Perry’s Capital account balance is a $20,000 partnership loan owed to Perry. Perry, Quincy, and Renquist shared profits and losses in a ratio of 2:4:4. Liquidation expenses were expected to be $15,000. All partners were insolvent. For what amount would the noncash assets need to be sold in order for Quincy to receive some cash from the liquidation? Multiple Choice A. Any amount in excess of $170,000. B. Any amount in excess of $190,000. C. Any amount in excess of $260,000. D. Any amount in excess of $280,000. E. Any amount in excess of $300,000.
The Field, Brown & Snow are partners and share income and losses equality. The partner decide to liquidate the partnership when their capital balances are as follows: Field, $131,250; Brown, $165,000; and Snow, $153,750. On May 31, the liquidation resulted in a loss of $405,000. 3. Assume that the partner with a deficit does not reimburse the partnership. Prepare journal entries (a) to transfer the deficit to the other partners and (b) to record the final disbursement of cash to the partners.
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Following is a series of independent cases. In each situation, indicate the cash distribution to be made to partners at the end of the liquidation process. Unless otherwise stated, assume that all solvent partners will reimburse the partnership for their deficit capital balances. Part A The Buarque, Monte, and Vinicius partnership reports the following accounts. Vinicius is personally insolvent and can contribute only an additional $34,000 to the partnership. Cash $ 155,000 Liabilities 60,000 Monte, loan 70,000 Buarque, capital (50% of profits and losses) 22,000 Monte, capital (25%) 43,000 Vinicius, capital (25%) (40,000 ) (deficit) Part B Drawdy, Langston, and Pearl operate a local accounting firm as a partnership. After working together for several years, they have decided to liquidate the partnership’s property. The partners have prepared the following balance sheet: Cash $ 45,000 Liabilities $ 59,500…
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