c) Dissolution: David Breck, Olivia Tsang and Cris Davis decide to liquidate their business. Theiraccount balances are the following:SportingFacilitiesAccounts OliviaTsang,СapitalCashAccum.LandDavidCrisDavis,СapitalAmort.PayableBreck,CapitalSportingfacilitiesСapitalbalance$168,000 $33, 000 $18,000$25,000$20,000$70,000$66,000$52,000prior toliquidationWrite the journal entries for the liquidation of the business (there will be multiple entries).

Partnership business means where two or more person comes together to do the business and share…

c) Dissolution: David Breck, Olivia Tsang and Cris Davis decide to liquidate their business. Their account balances are the following: Accounts Olivia Tsang, Capital Cash Sporting Facilities Accum. Land Amort. Sporting facilities David Breck, Сapital Cris Davis, Сapital Payable Сaptal balance $168,000 $33, 000 $18,000 $66,000 $25,000 $20,000 $70,000 $52,000 prior to liquidation Write the journal entries for the liquidation of the business (there will be multiple entries).

c) Dissolution: David Breck, Olivia Tsang and Cris Davis decide to liquidate their business. Their account balances are the following: Accounts Olivia Tsang, Capital Cash Sporting Facilities Accum. Land Amort. Sporting facilities David Breck, Сapital Cris Davis, Сapital Payable Сaptal balance $168,000 $33, 000 $18,000 $66,000 $25,000 $20,000 $70,000 $52,000 prior to liquidation Write the journal entries for the liquidation of the business (there will be multiple entries).

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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Shauna and Danielle decided to liquidate their jointly owned corporation, Woodward Fashions Incorporated (WFI). After liquidating its remaining inventory and paying off its remaining liabilities, WFI had the following tax accounting balance sheet: Adjusted FMV Таx Basis Appreciation $ 165,000 33,000 $ 165,000 16,500 Cash Building 16,500 132,000 66,000 $ 247,500 Land 66,000 $ 330,000 $ 82,500 Total Under the terms of the agreement, Shauna will receive the $165,000 cash in exchange for her 50 percent interest in WFI. Shauna's tax basis in her WFI stock is $41,250. Danielle will receive the building and land in exchange for her 50 percent interest in WFI. Danielle's tax basis in her WFI stock is $82,500. Assume for purposes of this problem that the cash available to distribute to the shareholders has been reduced by any tax paid by the corporation on gain recognized as a result of the liquidation. (Negative amounts should be indicated by a minus sign.) c. What amount of gain or loss does…
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