After 25 years of operations, the Orange, Banana, and Pineapple partnership has decided to liquidate. At that time, 1/1/20x2, the partnership balance sheet is as follows: Orange, Banana, and Pineapple, Partners Balance Sheet as of 12/31/20x1 Assets Liabilities and Partners' Capital Cash $80,000 Liabilities $47,000 Noncash assets 205,000 Orange, Capital 138,000 Banana, Capital 119,500 Pineapple, Capital (19,500) Total assets $285,000 Total Liabilities and Capital $285,000 In accordance with the Articles of Partnership, the partners agreed to share profits and losses as follows: Orange, Capital 30% Banana, Capital 40% Pineapple, Capital 30% The partnership estimates liquidation expenses of $10,000. A. Before beginning liquidation activities, the partnership agrees that Pineapple must eliminate her deficit balance. Assuming the noncash assets have zero value, what is the maximum amount Pineapple must contribute to the partnership to eliminate the deficit balance in her capital account? Cash $80,000 Liabilities -$47,000 Liquidation Exp -$10,000 Net Cash $23,000 Loss of 205,000 (non cash) * 30% (pineapples Share)= 64,500 loss. (19,500) - (64,500) pineapple must contribute 84,000 Assuming maximum losses, prepare a formal Statement of Liquidation for the partnership. Based on your schedule of liquidation, how much will be distributed to each partner upon full liquidation? C. Orange believes the partnership will receive at least $80,000 for the noncash assets. Assuming Orange is correct, prepare a schedule showing the amount she will receive if the noncash assets are liquidated for В. $80,000. D. For the Orange, Banana, & Pineapple partnership, compute the total amount of cash available for safe payment before disposal of any noncash assets.
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
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