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 $ 111,000 93,000 10,000 104,000 Bell's creditors have filed a $45,000 claim against the partnership's assets. The partnership currently holds assets of $540,000 and liabilities of $222,000. An Independent appraiser Indicates that the assets can be sold for $310,000. 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 Cash BELL, HARDY, DENNARD, AND SUDDATH PARTNERSHIP Statement of Partnership Liquidation (Hypothetical) Assets Liabilities Bell, Capital 40% Hardy, Capital 30% Dennard, Capital 20% Suddath, Capital 10% Sale of assets Subtotal $ 0 ° 0 0 0 ° ° Pay liabilities Subtotal $ O $ 0 $ 0 S 0 $ 0 $ 0 $ 0 Allocate deficit Subtotal $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Distribute cash Ending balances $ $ $ 0 $ 0 $ 0 $ 0 $ 0
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 $ 111,000 93,000 10,000 104,000 Bell's creditors have filed a $45,000 claim against the partnership's assets. The partnership currently holds assets of $540,000 and liabilities of $222,000. An Independent appraiser Indicates that the assets can be sold for $310,000. 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 Cash BELL, HARDY, DENNARD, AND SUDDATH PARTNERSHIP Statement of Partnership Liquidation (Hypothetical) Assets Liabilities Bell, Capital 40% Hardy, Capital 30% Dennard, Capital 20% Suddath, Capital 10% Sale of assets Subtotal $ 0 ° 0 0 0 ° ° Pay liabilities Subtotal $ O $ 0 $ 0 S 0 $ 0 $ 0 $ 0 Allocate deficit Subtotal $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Distribute cash Ending balances $ $ $ 0 $ 0 $ 0 $ 0 $ 0
Chapter11: Partnerships: Distributions, Transfer Of Interests, And Terminations
Section: Chapter Questions
Problem 4BCRQ
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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
$ 111,000
93,000
10,000
104,000
Bell's creditors have filed a $45,000 claim against the partnership's assets. The partnership currently holds assets of $540,000 and
liabilities of $222,000. An Independent appraiser Indicates that the assets can be sold for $310,000.
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
Cash
BELL, HARDY, DENNARD, AND SUDDATH PARTNERSHIP
Statement of Partnership Liquidation (Hypothetical)
Assets
Liabilities
Bell, Capital
40%
Hardy, Capital
30%
Dennard,
Capital 20%
Suddath,
Capital 10%
Sale of assets
Subtotal
$
0
°
0
0
0
°
°
Pay liabilities
Subtotal
$
O
$
0
$
0
S
0
$
0
$
0
$
0
Allocate deficit
Subtotal
$
0
$
0
$
0
$
0
$
0
$
0
$
0
Distribute cash
Ending balances
$
$
$
0
$
0
$
0
$
0
$
0
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