A partnership is considering possible liquidation because one of the partners (Bell) is personally insolvent. Profits and losses are divided on a 4:3:2:1 basis, respectively. Capital balances at the current time are Bell, capital Hardy, capital Dennard, capital Suddath, capital Bell's creditors have filed a $29,000 claim against the partnership's assets. The partnership currently holds assets of $380,000 and liabilities of $146,000. An independent appraiser indicates that the assets can be sold for $230,000. Required: Prepare a statement of partnership liquidation to determine the amount of cash that Bell would receive from the sale of partnership assets. Note: Amounts to be deducted should be entered with a minus sign. Balances Sale of assets Subtotal Pay liabilities Subtotal Allocate deficit Subtotal Distribute cash Ending balances $ $ $70,000 64,000 12,000 88,000 $ $ $ $ Cash BELL, HARDY, DENNARD, AND SUDDATH PARTNERSHIP Statement of Partnership Liquidation (Hypothetical) 0 0 0 $ 0 $ 0 $ 0 $ Assets 0 0 0 0 0 0 0 Liabilities $ $ $ 0 0 146,000 146,000 $ 0 146,000 Bell, Capital Hardy, Capital 40% 30% 64,00 0 $ 146,000 $ $ 0 0 0 $ 0 $ 0 $ 64,000 0 Dennard, Capital 20% $ 64,000 $ 64,000 $ 64,000 $ 12,000 $ 12,000 0 12,000 $ 12,000 Suddath, Capital 10% 0 12,000 $ $ 88,000 88,000 0 88,000 88,000 88,000
A partnership is considering possible liquidation because one of the partners (Bell) is personally insolvent. Profits and losses are divided on a 4:3:2:1 basis, respectively. Capital balances at the current time are Bell, capital Hardy, capital Dennard, capital Suddath, capital Bell's creditors have filed a $29,000 claim against the partnership's assets. The partnership currently holds assets of $380,000 and liabilities of $146,000. An independent appraiser indicates that the assets can be sold for $230,000. Required: Prepare a statement of partnership liquidation to determine the amount of cash that Bell would receive from the sale of partnership assets. Note: Amounts to be deducted should be entered with a minus sign. Balances Sale of assets Subtotal Pay liabilities Subtotal Allocate deficit Subtotal Distribute cash Ending balances $ $ $70,000 64,000 12,000 88,000 $ $ $ $ Cash BELL, HARDY, DENNARD, AND SUDDATH PARTNERSHIP Statement of Partnership Liquidation (Hypothetical) 0 0 0 $ 0 $ 0 $ 0 $ Assets 0 0 0 0 0 0 0 Liabilities $ $ $ 0 0 146,000 146,000 $ 0 146,000 Bell, Capital Hardy, Capital 40% 30% 64,00 0 $ 146,000 $ $ 0 0 0 $ 0 $ 0 $ 64,000 0 Dennard, Capital 20% $ 64,000 $ 64,000 $ 64,000 $ 12,000 $ 12,000 0 12,000 $ 12,000 Suddath, Capital 10% 0 12,000 $ $ 88,000 88,000 0 88,000 88,000 88,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Ashvin
Transcribed Image Text:A partnership is considering possible liquidation because one of the partners (Bell) is personally insolvent. Profits and losses are
divided on a 4:3:2:1 basis, respectively. Capital balances at the current time are
Bell, capital
Hardy, capital
Dennard, capital
Suddath, capital
Bell's creditors have filed a $29,000 claim against the partnership's assets. The partnership currently holds assets of $380,000 and
liabilities of $146,000. An independent appraiser indicates that the assets can be sold for $230,000.
Required:
Prepare a statement of partnership liquidation to determine the amount of cash that Bell would receive from the sale of partnership
assets.
Note: Amounts to be deducted should be entered with a minus sign.
Balances
Sale of assets
Subtotal
Pay liabilities
Subtotal
Allocate deficit
Subtotal
Distribute cash
Ending balances
$
$
$ 70,000
64,000
12,000
88,000
$
$
$
$
Cash
BELL, HARDY, DENNARD, AND SUDDATH PARTNERSHIP
Statement of Partnership Liquidation (Hypothetical)
0
0
0
0
0
$
$
$
0 $
Assets
0
0
0
0
0
0
0
Liabilities
$
$
$
0
0
146,000
146,000 $
0
Bell, Capital Hardy, Capital
40%
30%
146,000 $
0
146,000
$
0
0
0
0
0
$ 64,000 $
$
$
Dennard,
Capital 20%
12,000
$
64,000
0
64,000 $
64,000 $
64,000 $
Suddath,
Capital 10%
$ 88,000
12,000
0
12,000 $
12,000 $
0
12,000
$
88,000
0
88,000
88,000
88,000
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