Kendra, Cogley, and Mel share income and loss in a 3:2:1 ratio (in ratio form: Kendra, 3/6; Cogley, 2/6; and Mel, 16). The partners have decided to liquidate their partnership. On the day of liquidation, their balance sheet appears as follows. Balance Sheet Accounts payable Kendra, Capital Cogley, Capital Mei, Capital Total assets $ 614,000 Total liabilities and equity Assets Cash Inventory $ 68,600 545,400 Liabilities Equity $ 242,500 74,300 167,175 130,025 $ 614,000 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 $624,600. 2. Inventory is sold for $433,200. 3. Inventory is sold for $312,600 and partners with deficits pay their deficits in cash. 4. Inventory is sold for $241,800 and partners with deficits do not pay their deficits.

Kendra, Cogley, and Mel share income and loss in a 3:2:1 ratio (in ratio form: Kendra, 3/6; Cogley, 2/6; and Mel, 16). The partners have decided to liquidate their partnership. On the day of liquidation, their balance sheet appears as follows. Balance Sheet Accounts payable Kendra, Capital Cogley, Capital Mei, Capital Total assets $ 614,000 Total liabilities and equity Assets Cash Inventory $ 68,600 545,400 Liabilities Equity $ 242,500 74,300 167,175 130,025 $ 614,000 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 $624,600. 2. Inventory is sold for $433,200. 3. Inventory is sold for $312,600 and partners with deficits pay their deficits in cash. 4. Inventory is sold for $241,800 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

Related questions

Q: Liquidating Partnerships Prior to liquidating their partnership, Ellis and Ericson had capital…

A: The partnership comes into existence when two or more persons agree to do the business and further…

Q: On January 1, the partners of Mori, Lux, and Khan (who share profits and losses in the ratio of…

A: Peace Meal Distribution:— In this method, assets are are assumed to be realized immediately at the…

Q: Question #7: Due to the fact that the partnership had been unprofitable for the past several years,…

A: Net Worth A person's or company's net worth is the value of their assets less the amount of…

Q: The following balance sheet is for a partnership in which the partners have decided to terminate…

A: Liquidation of a partnership refers to the process of winding up and settling the affairs of a…

Q: Part B: Prepare a final statement of partnership liquidation. Complete this question by entering…

A: A business combination is the union of the small business units into one. The new combined unit is…

Q: On January 1, the partners of Van, Bakel, and Cox (who share profits and losses in the ratio of…

A: Let's break down the process step by step:**January:**1. **Available Cash at the Beginning of…

Q: Liquidating Partnerships Prior to liquidating their partnership, Perkins and Ericson had capital…

A: The partnership comes into existence when two or more persons agree to do the business and further…

Q: Matthews, Mitchell, and Michaels are partners in BG Land Development Company and share losses in a…

A: The partnership is a form of business where minimum two persons work together at one place. The…

Q: On January 1, the partners of Mori, Lux, and Khan (who share profits and losses in the ratio of…

A: To prepare the proposed schedules of liquidation, we need to calculate the available cash after each…

Q: Prepare a statement of realization and liquidation for the CDG Partnership on December 10, 20X6.(Do…

A: The realization and liquidation statement is prepared in which the assets and payments made is…

Q: The partnership of Larson, Norris, Spencer, and Harrison has decided to terminate operations and…

A: Partnership is a form of business in which two or more persons carry a business and share profit and…

Q: A local partnership was considering the possibility of liquidation. Capital account balances at that…

A: The partnership comes into existence when two or more persons agree to do the business and further…

Q: Kendra, Cogley, and Mei share income and loss in a 3:2:1 ratio (in ratio form: Kendra, 3/6; Cogley,…

A: The gain or loss on the sale of inventory is computed by deducting the cost of inventory from the…

Q: Managerial Accounting - TRUE OR FALSE Manufacturing costs include rent on a factory, direct and…

A: Direct costs are those costs which are directly involved in the production of the goods. Indirect…

Q: On January 1, the partners of Van, Bakel, and Cox (who share profits and losses in the ratio of…

A: Van, Bakel, and Cox Partnership - Proposed Schedules of LiquidationJanuary 31st:Description Amount…

Q: REQUIRED: Prepare working paper for the Statement of Liquidation using the lump sum liquidation…

Q: The following balance sheet is for a partnership in which the partners have decided to terminate…

A: When a partnership firm is dissolved, its business operations are terminated and the name of the…

Q: Which of the following is a true statement with respect to the gross income test for the qualifying…

A: With respect to thee gross income test for the qualifying relative dependency exemption the relative…

Q: The following condensed balance sheet is for the partnership of Ludolf, Sambal, and Urad, who share…

A: According to the question given, we need to prepare the partnership liquidation statement, and, how…

Q: Required: For each of the following scenarios, complete the schedule allocating the gain or loss on…

A: Disclaimer: "Since the question you have asked contains multiple sub-parts so we solve the first…

Q: Alex and Bess have been in partnership for many years. The partners, who share profits and losses on…

A: It is an agreement between two or more parties to conduct the business and share the profits and…

Q: Alex and Bess have been in partnership for many years. The partners, who share profits and losses on…

A: Liquidation of Partnership - Liquidation of partnership is the process of selling all the assets…

Q: Kendra, Cogley, and Mei share income and loss in a 3:2:1 ratio (in ratio form: Kendra, 3⁄6; Cogley,…

A: Liquidation is the process of bringing a business to an end and sell its assets in order to repay…

Q: Alex and Bess have been in partnership for many years. The partners, who share profits and losses on…

A: It is an agreement between two or more parties to conduct the business and share the profits and…

Q: Alex and Bess have been in partnership for many years. The partners, who share profits and losses on…

A: Partnership is the relation between two or more person, It has the following characteristicsThey…

Q: Required information Skip to question [The following information applies to the questions displayed…

A: Partnership : Arrangement between two or more people whereby they agree to manage business…

Question

Kendra, Cogley, and Mel 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
$ 68,600
545,400
Balance Sheet
Accounts payable
Liabilities
Equity
Kendra, Capital
Cogley, Capital
Mei, Capital
Total assets $ 614,000 Total liabilities and equity
1. Inventory is sold for $624,600.
2. Inventory is sold for $433,200.
$ 242,500
74,300
167,175
130,025
$ 614,000
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.
3. Inventory is sold for $312,600 and partners with deficits pay their deficits in cash.
4. Inventory is sold for $241,800 and partners with deficits do not pay their deficits.
Complete this question by entering your answers in the tabs below.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduction

VIEW

Step 2: Computation of Gain on sale and its distribution with journal entries

VIEW

Step 3: Determination of Loss on sale and its distribution with journal entries

VIEW

Step 4: Determination of loss on sale of inventory and its distribution to partners

VIEW

Step 5: Computation of loss on sale of inventory and its distribution to partner's capital

VIEW

Solution

VIEW

Step by step

Solved in 6 steps with 16 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

On January 1, the partners of Van, Bakel, and Cox (who share profits and losses in the ratio of 5:3:2, respectively) decide to terminate operations and liquidate their partnership. The trial balance at this date follows: Cash Accounts receivable Inventory Machinery and equipment, net Van, loan Accounts payable Bakel, loan Van, capital Bakel, capital Cox, capital Totals February $ March Debit 36,000 102,000 88,000 225,000 66,000 $ Credit 95,000 56,000 The partners plan a program of piecemeal conversion of the partnership's assets to minimize liquidation losses. All available cash, less an amount retained to provide for future expenses, is to be distributed to the partners at the end of each month. A summary of the liquidation transactions follows: January 166,000 108,000 92,000 $ 517,000 $ 517,000 Collected $69,000 of the accounts receivable; the balance is deemed uncollectible. Received $56,000 for the entire inventory. Paid $4,000 in liquidation expenses. Paid $90,000 to the outside…
The capital balances and profit and loss ratios in ABC Partnership on December 31 are as follows: Partner Capital Balance Profit and Loss Ratio A. Alpha $72,000 60% B. Bravo $29,650 30% C. Charlie $24,000 10% Charlie is withdrawing from the company. Instructions: Journalize the withdrawal of Charlie under each of the following independent assumptions: a. Using personal funds, Bravo agrees to purchase Charlie's ownership interest for $29,000 cash. b. Charlie is paid $29,000 from partnership assets. c. Charlie is paid $19,100. Round amounts to the nearest dollar. Show ALL calculations for full marks.
None
please answer do not image format
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.
A-7
Subject: accounting
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…
Journalize the entries for the following transactions: a. Sold merchandise for cash, 25400. The cost of the merchandise was 15240. (Record the sale first.) b. Sold merchandise on account, 10610. The cost of merchandise sold was 6370. (Record the sale first.) c. Sold merchandise to customers who used MasterCard and Visa, $117,060. The cost of the merchandise sold was $70,240. (Record the sale first.) d. Sold merchandise to customers who used American Express, $40,890. The cost of the merchandise sold was $24,530. (Record the sale first.) e. Paid $7,870 to National Clearing House Credit Co. for service fees for processing Mastercard, Visa, and American Express sales.