A partnership has gone through liquidation and now reports the following account balances: $ 16,000 3,000 (2,000) (deficit) (5,000) (deficit) 13,000 7,000 Cash Loan from Molina Ashean, capital Molina, capital Pinckney, capital Diaz, capital Profits and losses are allocated on the following basis: Ashman, 30 percent; Molina, 20 percent, Pinckney, 30 percent; and Diaz, 20 percent. Required: Calculate the safe payments that can be made to individual partners. Adjusted balances (safe payments) Ashman Molina Pinckney $ 2,400$ 1.600 $ 10,600 Diaz 5,400

A partnership has gone through liquidation and now reports the following account balances: $ 16,000 3,000 (2,000) (deficit) (5,000) (deficit) 13,000 7,000 Cash Loan from Molina Ashean, capital Molina, capital Pinckney, capital Diaz, capital Profits and losses are allocated on the following basis: Ashman, 30 percent; Molina, 20 percent, Pinckney, 30 percent; and Diaz, 20 percent. Required: Calculate the safe payments that can be made to individual partners. Adjusted balances (safe payments) Ashman Molina Pinckney $ 2,400$ 1.600 $ 10,600 Diaz 5,400

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: The condensed, adjusted trial balance of the Gary and James Partnership as at December 31, 2024,…

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

Q: The following condensed balance sheet is for the partnership of Miller, Tyson, and Watson, who share…

A: A partnership is a legally binding contract involving two or more individuals or entities to jointly…

Q: A and B form a partnership

A: a. Capital Account balances of A and B after one year.To calculate the capital account balance,…

Q: The profit allocation by A is:

A: The following question belongs to partnership. The final profit allocation is calculated by…

Q: On January 1, 2025, Nelson Co. leased a building to Wise Inc. The relevant information related to…

A: To determine the value of the **Right-of-Use (ROU) asset** for Wise Inc. in the lease arrangement,…

Q: Assume the partnership income-sharing agreement calls for income to be divided with a salary of…

A: A journal entry is a record of a business sale in account. It's the first step in the account…

Q: 6. The ABC partnership balance sheet, immediately before liquidation, had the following balances:…

A: Partnership:The partnership refers to the arrangement when more than two individuals come together…

Q: Alexander, Capital $68,000 78,000 88,000 Bertrand, Capital Coloma, Capital The articles of…

A: A partnership is a form of business where two or more individuals make a partnership agreement to…

Q: As of January 1, 2021, the partnership of Carlin, Yearly, and Granite had the following account…

A: As granite capital is in negative the partner will bring cash upto that amount. 1. Determination…

Q: Osha, a cash basis calendar-year partnership, began business on April 1, 20X5. Osha incurred and…

Q: Partnership (a calendar-year-end entity) has the following assets as of December 31 of the current…

A: In partnership the partner contribute equally in the partnership and they receive the profit in…

Q: Harry, Tony, and Liza run a partnership firm and share in the profits 1:3:2, respectively. In the…

A: 1. Ist and most important thing is that we have to pass entry for distribution to partners…

Q: Prepare a cash distribution plan.

A: To prepare a cash distribution plan, we need to first calculate the amount of cash that will be…

Q: Prepare a program showing how cash should be distributed if the liabilities are $15,000. B) Make the…

A: Partnership can be defined as the form of business organization, which consists of two or more…

Q: A partner receives the following in a liquidating distribution: Basis $12,000 FMV $12,000 4,000 0…

A: It is an agreement between two or more parties to conduct the business and share the profits and…

Q: The Pen, Evan, and Torves Partnership has asked you to assist in winding-up its business affairs.…

A: An organization's operations are terminated during winding up, and any leftover assets are…

Q: Capital X, Y, and Z are $10,000 and $8,000 and $10,000, respectively: Profits are divided in the…

A: Partnership is a business in which two or more than two persons agree to carry common business and…

Q: The ABC Partnership is to be liquidated. The ledger shows the following: Cash…

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

Question

A partnership has gone through liquidation and now reports the following account balances:
$ 16,000
3,000
(2,000) (deficit)
(5,000) (deficit)
Cash
Loan from Molina
Ashean, capital
Molina, capital
Pinckney, capital
Diaz, capital
13,000
7,000
Profits and losses are allocated on the following basis: Ashman, 30 percent; Molina, 20 percent, Pinckney, 30 percent; and Diaz, 20
percent.
Required:
Calculate the safe payments that can be made to individual partners.
Adjusted balances (safe payments)
Molina Pinckney
$ 2.400$ 1.600 $ 10,600 $
Ashman
Diaz
5,400

Expert Solution

This question has been solved!

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

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Concept introduction

VIEW

Step 2: Computation of safe payments that can be made to individual partners

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 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

(J) The partnership agreement for Wilson, Pickett & Nelson, a general partnership, provided that profits or losses be shared between the partners in the ratio of their financial contributions to the partnership. Wilson contributed $65,000, Pickett contributed $39,000 and Nelson contributed $13,000. In the partnership's first year of operation, it incurred a loss of $184,500. What amount of the partnership's loss is allocated to Nelson? Multiple Choice : $46,125 $92,250 $61,500 $20,500 $0
The partnership of Kylie, Bamboo and Tank is being liquidated. The summarized balance sheet below depicts their financial position before liquidation: Cash Loans to Tank Other non-cash assets P 30,000 70,000 600,000 The other non-cash assets were sold at P400,000. 1. The excess cash distributed to Kylie is P40,000 A. True B. False Accounts payables P Kylie, loan Kylie, capital (40%) Bambo, capital (20%) Tank, capital (40%) 2. The excess cash distributed to Tank is P110,000 A. True B. False 3. The ending balance of non-cash assets after liquidation is P200,000 A. True B. False 280,000 30,000 90,000 150,000 150,000
The following condensed balance sheet is for the partnership of Hardwick, Saunders, and Ferris, who share profits and losses in the ratio of 4:3:3, respectively: Cash Other assets Hardwick, loan Total assets $ 93,000 815,000 44,000 Beginning balances Sold assets $952,000 Accounts payable Ferris, loan Hardwick, capital Saunders, capital Ferris, capital Adjusted balances Max loss on remaining noncash assets Paid liabilities Safe payments Total liabilities and capital The partners decide to liquidate the partnership. Forty percent of the other assets are sold for $125,000. Prepare a proposed schedule of liquidation at this point in time. (Amounts to be deducted should be entered with a minus sign.) HARDWICK, SAUNDERS, AND FERRIS Proposed Schedule of Liquidation Cash Other Assets $ 48,000 54,000 380,000 240,000 230,000 $952,000 Accounts Payable Hardwick, Loan and Capital Saunders, Capital Ferris, Loan & Capital
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 Pen, Evan, and Torves Partnership has asked you to assist in winding-up its business affairs. You compile the following information: 1. The partnership's trial balance on June 30, 20X1, Is Cash Accounts Receivable (net) Inventory Plant and Equipment (net) Accounts Payable Pen, Capital Evan, Capital Torves, Capital Total Profit and loss percentages Preliquidation capital balances Loss absorption potential (capital balances / loss percent) Decrease highest LAP to next highest: Debit $ 6,800 30,000 22,000 99,700 Decrease LAPS to next highest: $ 158,500 2. The partners share profits and losses as follows: Pen, 50 percent; Evan, 30 percent; and Torves, 20 percent. 3. The partners are considering an offer of $108,000 for the firm's accounts receivable, Inventory, and plant and equipment as of June 30. The $108,000 will be paid to creditors and the partners in Installments, the number and amounts of which are to be negotiated. Required: Prepare a cash distribution plan as of June 30,…
The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to liquidation: Cash Noncash assets $ 41,000 229,000 Liabilities Drysdale, loan Drysdale, capital (50%) Koufax, capital (30%) Marichal, capital (20%) $46,500 21,000 77,500 67,500 57,500 a-1. Determine the maximum loss that can be absorbed in Step 1. Then, assuming that this loss has been incurred, determine the next maximum loss that can be absorbed in Step 2. a-2. Liquidation expenses are estimated to be $20,000. Prepare a predistribution schedule to guide the distribution of cash. Further, modify the tags in explanation as well. b. Assume that assets costing $79,000 are sold for $62,500. How is the available cash to be divided?
At year-end, the Queen City partnership has the following capital balances: $ 340,000 320,000 Isabella, Capital Catherine, Capital Elizabeth, Capital Victoria, Capital 290,000 280,000 Profits and losses are split on a 3:3:2:2 basis, respectively. Elizabeth decides to leave the partnership and is paid $320,000 from the business based on the original contractual agreement. Required: The payment made to Elizabeth beyond her capital account was for Elizabeth's share of previously unrecognized goodwill. After recognizing partnership goodwill, compute Isabella's capital balance after Elizabeth withdraws. Isabella's capital before withdrawal of Elizabeth Isabella's share of goodwill recognition Isabella's capital balance after withdrawal of Elizabeth $ 0
The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to liquidation: Cash $ 37,000 Liabilities $ 49,000 Noncash assets 209,000 Drysdale, loan 12,500 Drysdale, capital (50%) 71,500 Koufax, capital (30%) 61,500 Marichal, capital (20%) 51,500 a-1. Determine the maximum loss that can be absorbed in Step 1. Then, assuming that this loss has been incurred, determine the next maximum loss that can be absorbed in Step 2. a-2. Liquidation expenses are estimated to be $16,000. Prepare a predistribution schedule to guide the distribution of cash. Further, modify the tags in explanation as well. b. Assume that assets costing $75,000 are sold for $60,500. How is the available cash to be divided?
The partnership of Ramos, Rios, Safar, and Wong is being liquidated. It currently holds cash of $20,900 but no other assets. Liabilities amount to $29,300. The capital balances are Ramos (30% of profits and losses) Rios (30%) Safar (20%) Wong (20%) Required: $ 26,600 27,000 (22,000) (40,000) (deficit) (deficit) a. If both Safar and Wong are personally insolvent, how much money must Rios contribute to the partnership? b-1. If only Wong is personally insolvent, how much money must Safar contribute to the partnership? b-2. If only Wong is personally insolvent, how will Safar's contribution (funds) be distributed? c. If only Safar is personally insolvent, how much money should Ramos receive from the liquidation? Note: For all requirements, do not round intermediate calculations. Round your answers to the nearest whole dollar amount. a. Rio's contribution b-1 Safar contribution b-2. Creditors b-2. Ramos b-2. Rios C. Ramos should receive