CALCULATION QUESTION At June 30 (5 years later). SANDY HAIR AND NAILS's is liquidated. Just before the liquidation, SANDY HAIR AND NAILS's has cash of $2.800, equipment of $45,000, accumulated amortization of $31,000, accounts payable of $6.000, and the following partner capital accounts: S. Chen $9.000: A. Liu $1.800. The partners at this time share in income or losses equally. Upon liquidation, the equipment is sold for $10,000 cash, the accounts payable are paid in full, and any remaining cash is distributed to the partners. If a partner's capital account is in a deficit balance, he or she will contribute the necessary cash to the partnership to cover it. Calculate how much cash will be paid to, or received from, each partner upon liquidation. Show your work. SHORT ANSWER When Sunny admitted Andy as a partner, he paid a bonus to Sunny. Why do you think that Andy was willing to do this? Under what circumstances would Sunny pay a bonus to Andy?

CALCULATION QUESTION At June 30 (5 years later). SANDY HAIR AND NAILS's is liquidated. Just before the liquidation, SANDY HAIR AND NAILS's has cash of $2.800, equipment of $45,000, accumulated amortization of $31,000, accounts payable of $6.000, and the following partner capital accounts: S. Chen $9.000: A. Liu $1.800. The partners at this time share in income or losses equally. Upon liquidation, the equipment is sold for $10,000 cash, the accounts payable are paid in full, and any remaining cash is distributed to the partners. If a partner's capital account is in a deficit balance, he or she will contribute the necessary cash to the partnership to cover it. Calculate how much cash will be paid to, or received from, each partner upon liquidation. Show your work. SHORT ANSWER When Sunny admitted Andy as a partner, he paid a bonus to Sunny. Why do you think that Andy was willing to do this? Under what circumstances would Sunny pay a bonus to Andy?

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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