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FINANCIAL ACCOUNTING
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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The partnership of Wing, Mehta, Rodgers, and Yan was formed several years ago as a local architectural firm. Several partners have recently undergone personal financial problems and have decided to terminate operations and liquidate the business. The following balance sheet is drawn up as a guideline for this process: Cash Accounts receivable Inventory Land Building and equipment (net) Total assets $ 47,000 114,000 133,000 101,000 184,000 Liabilities Rodgers, loan Wing, capital (30%) Mehta, capital (18%) Rodgers, capital (20x) Yan, capital (48%) $579,000 Total liabilities and capital $ 63,000 67,000 168,000 128,000 98,802 71,000 $ 579,000 When the liquidation commenced, liquidation expenses of $14,000 were anticipated as being necessary to dispose of all property. Required: Part A Prepare a predistribution plan for this partnership. Part B The following transactions transpire during the liquidation of the Wing. Mehta, Rodgers, and Yan partnership: 1. Collected 90 percent of the total accounts receivable with the rest judged to be uncollectible. 2. Sold the land, building, and equipment for $166,000. 3. Distributed safe payments of cash. 4. Learned that Yan, who has become personally insolvent, will make no further contributions. 5. Paid all liabilities. 6. Sold all inventory for $87,000. 7. Distributed safe payments of cash again.. 8. Paid actual liquidation expenses of $8,000 only. 9. Made final cash disbursements to the partners based on the assumption that all partners other than Yen are personally solvent. Prepare journal entries to record these liquidation transactions. Complete this question by entering your answers in the tabs below. Part A Part B Prepare a predistribution plan for this partnership. Note: Do not round intermediate calculations. Wing. Mehta, Capital Capital Rodgers, Loan and Capital Yan, Capital Beginning balances Assumed loss of Schedule 1 Step one balances $ 0 S 0 S 0 S о Assumed loss of Schedule 2 Step two balances $ 0 $ 0 S 05 0 Assumed loss of Schedule 3 Step three balances $ 0 S 0 S 0 S D Part A Part B >
Transcribed Image Text:The partnership of Wing, Mehta, Rodgers, and Yan was formed several years ago as a local architectural firm. Several partners have recently undergone personal financial problems and have decided to terminate operations and liquidate the business. The following balance sheet is drawn up as a guideline for this process: Cash Accounts receivable Inventory Land Building and equipment (net) Total assets $ 47,000 114,000 133,000 101,000 184,000 Liabilities Rodgers, loan Wing, capital (30%) Mehta, capital (18%) Rodgers, capital (20x) Yan, capital (48%) $579,000 Total liabilities and capital $ 63,000 67,000 168,000 128,000 98,802 71,000 $ 579,000 When the liquidation commenced, liquidation expenses of $14,000 were anticipated as being necessary to dispose of all property. Required: Part A Prepare a predistribution plan for this partnership. Part B The following transactions transpire during the liquidation of the Wing. Mehta, Rodgers, and Yan partnership: 1. Collected 90 percent of the total accounts receivable with the rest judged to be uncollectible. 2. Sold the land, building, and equipment for $166,000. 3. Distributed safe payments of cash. 4. Learned that Yan, who has become personally insolvent, will make no further contributions. 5. Paid all liabilities. 6. Sold all inventory for $87,000. 7. Distributed safe payments of cash again.. 8. Paid actual liquidation expenses of $8,000 only. 9. Made final cash disbursements to the partners based on the assumption that all partners other than Yen are personally solvent. Prepare journal entries to record these liquidation transactions. Complete this question by entering your answers in the tabs below. Part A Part B Prepare a predistribution plan for this partnership. Note: Do not round intermediate calculations. Wing. Mehta, Capital Capital Rodgers, Loan and Capital Yan, Capital Beginning balances Assumed loss of Schedule 1 Step one balances $ 0 S 0 S 0 S о Assumed loss of Schedule 2 Step two balances $ 0 $ 0 S 05 0 Assumed loss of Schedule 3 Step three balances $ 0 S 0 S 0 S D Part A Part B >
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