Kendra, Cogley, and Mei share income and loss in a 3:2:1 ratio (in ratio form: Kendra, 3/6; Cogley, 2/6; and Mei, 1/6). The partners have decided to liquidate their partnership. On the day of liquidation, their balance sheet appears as follows. Assets Cash Inventory Total assets Balance Sheet Accounts payable Kendra, Capital Cogley, Capital Mei, Capital $ 629,000 Total liabilities and equity $76,400 552,600 Liabilities Equity $ 247,000 76,400 171,900 133,700 $ 629,000 Required: For each of the following scenarios, complete the schedule allocating the gain or loss on the sale of inventory. Prepare journal entries to record the below transactions. Note: Do not round intermediate calculations. Enter losses and partner deficits, if any, as negative amounts. 1. Inventory is sold for $608,400. 2. Inventory is sold for $426,600. 3. Inventory is sold for $349,200 and partners with deficits pay their deficits in cash. 4. Inventory is sold for $258,600 and partners with deficits do not pay their deficits.

Kendra, Cogley, and Mei share income and loss in a 3:2:1 ratio (in ratio form: Kendra, 3/6; Cogley, 2/6; and Mei, 1/6). The partners have decided to liquidate their partnership. On the day of liquidation, their balance sheet appears as follows. Assets Cash Inventory Total assets Balance Sheet Accounts payable Kendra, Capital Cogley, Capital Mei, Capital $ 629,000 Total liabilities and equity $76,400 552,600 Liabilities Equity $ 247,000 76,400 171,900 133,700 $ 629,000 Required: For each of the following scenarios, complete the schedule allocating the gain or loss on the sale of inventory. Prepare journal entries to record the below transactions. Note: Do not round intermediate calculations. Enter losses and partner deficits, if any, as negative amounts. 1. Inventory is sold for $608,400. 2. Inventory is sold for $426,600. 3. Inventory is sold for $349,200 and partners with deficits pay their deficits in cash. 4. Inventory is sold for $258,600 and partners with deficits do not pay their deficits.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

None
please answer do not image format
Liquidating Partnerships Prior to liquidating their partnership, Fowler and Ericson had capital accounts of $26,000 and $51,000, respectively. Prior to liquidation, the partnership had no cash assets other than what was realized from the sale of assets. These partnership assets were sold for $93,000. The partnership had $4,000 of liabilities. Fowler and Ericson share income and losses equally. Determine the amount received by Fowler as a final distribution from liquidation of the partnership.$fill in the blank 1
Alex and Bess have been in partnership for many years. The partners, who share profits and losses on a 60:40 basis, respectively, wish to retire and have agreed to liquidate the business. Liquidation expenses are estimated to be $5,000. At the date the partnership ceases operations, the balance sheet is as follows: Cash Noncash assets Total assets Liabilities Alex, capital Bess, capital $ 200,000 Total liabilities and capital $ 50,000 150,000 Part A: Prepare journal entries for the following transactions that occurred in chronological order: a. Distributed safe cash payments to the partners. b. Paid $30,000 of the partnership's liabilities. c. Sold noncash assets for $160,000. d. Distributed safe cash payments to the partners. e. Paid remaining partnership liabilities of $10,000. f. Paid $4,000 in liquidation expenses; no further expenses will be incurred. g. Distributed remaining cash held by the business to the partners. $ 40,000 90,000 70,000 $ 200,000 Part B: Prepare a final…
The following account balances were available for the Perry, Quincy, and Renquist partnership just before it entered liquidation: Cash $ 90,000 Liabilities $ 170,000 Noncash assets 300,000 Perry, capital 70,000 Quincy, capital 50,000 Renquist, capital 100,000 Total $ 390,000 Total $ 390,000 Included in Perry’s Capital account balance is a $20,000 partnership loan owed to Perry. Perry, Quincy, and Renquist shared profits and losses in a ratio of 2:4:4. Liquidation expenses were expected to be $15,000. All partners were insolvent. For what amount would the noncash assets need to be sold in order for Quincy to receive some cash from the liquidation? Multiple Choice A. Any amount in excess of $170,000. B. Any amount in excess of $190,000. C. Any amount in excess of $260,000. D. Any amount in excess of $280,000. E. Any amount in excess of $300,000.
The Field, Brown & Snow are partners and share income and losses equality. The partner decide to liquidate the partnership when their capital balances are as follows: Field, $131,250; Brown, $165,000; and Snow, $153,750. On May 31, the liquidation resulted in a loss of $405,000. 3. Assume that the partner with a deficit does not reimburse the partnership. Prepare journal entries (a) to transfer the deficit to the other partners and (b) to record the final disbursement of cash to the partners.
er to liquidating their partnership, Craig and Jenny had capital accounts of $77,260 and $108 23,230. The partnership had $22,940 of liabilities. Craig and Jenny share income and losses termine the amount received by Jenny as a final distribution from liquidation of the partnersh
A-7
Following is a series of independent cases. In each situation, indicate the cash distribution to be made to partners at the end of the liquidation process. Unless otherwise stated, assume that all solvent partners will reimburse the partnership for their deficit capital balances. Part A The Buarque, Monte, and Vinicius partnership reports the following accounts. Vinicius is personally insolvent and can contribute only an additional $34,000 to the partnership. Cash $ 155,000 Liabilities 60,000 Monte, loan 70,000 Buarque, capital (50% of profits and losses) 22,000 Monte, capital (25%) 43,000 Vinicius, capital (25%) (40,000 ) (deficit) Part B Drawdy, Langston, and Pearl operate a local accounting firm as a partnership. After working together for several years, they have decided to liquidate the partnership’s property. The partners have prepared the following balance sheet: Cash $ 45,000 Liabilities $ 59,500…
Alex and Bess have been in partnership for many years. The partners, who share profits and losses on a 70:30 basis, respectively, wish to retire and have agreed to liquidate the business. Liquidation expenses are estimated to be $6,500. At the date the partnership ceases operations, the balance sheet is as follows: $ 65,000 240,000 $ 47,500 168,000 89,500 Cash Liabilities Noncash assets Alex, capital Bess, capital Total liabilities and capital Total assets $ 305,000 $ 305,000 Part A: Prepare journal entries for the following transactions that occurred in chronological order: a. Distributed safe cash payments to the partners. b. Paid $28,500 of the partnership's liabilities. c. Sold noncash assets for $257,500. d. Distributed safe cash payments to the partners. e. Paid remaining partnership liabilities of $19,000. f. Paid $5,100 in liquidation expenses; no further expenses will be incurred. g. Distributed remaining cash held by the business to the partners. Part B: Prepare a final…
The CDG Carlos, Dan, and Gail Partnership has decided to liquidate as of December 1, 20X6. A balance sheet on the date follows: Assets Cash Accounts Receivable (net) Inventories Property, Plant and Equipment (net) Total Assets Liabilities and Capital Liabilities: Accounts Payable Capital: Carlos, Capital Dan, Capital Gail, Capital Total Capital Total Liabilities and Capital CDG PARTNERSHIP Balance Sheet At December 1, 20x6- Personal assets. Personal liabilities Personal net worth Preliquidation balances Sale of assets and distribution of loss Additional Information 1. Each partner's personal assets (excluding partnership capital interests) and personal liabilities as of December 1, 20X6, follow: Cash contributed by Gail to extent of positive net worth Distribution of deficit of insolvent partner Contribution by Dan to remedy deficit Payment to creditors Carlos $ 266,000 (238,000) $ 28,000 Payment to partner Postliquidation balances $136,000 66,000 76,000 2. Carlos, Dan, and Gail share…