Liquidating Partnerships-Deficiency Prior to liquidating their partnership, Pepper and Bain had capital accounts of $15,000 and $58,000, respectively. The partnership assets were sold for $27,000. The partnership had no liabilities. Pepper and Bain share income and losses equally. Required: a. Determine the amount of Pepper's deficiency. 43,000 X b. Determine the amount distributed to Bain, assuming that Pepper is unable to satisfy the deficiency. 43,000 X Feedback Check My Work a. 1. Begin with Pepper's equity prior to liquidation 2 Adjust Pepper's equity for the gain or loss on the sale of the assets. 3. Allocate the gain/loss to partner capital accounts based on equal share. 4. Add beginning equity plus allocated gain/loss to determine liquidation deficiency b. If a partner is unable to satisfy a deficiency, the balance is shared among the remaining partners
Liquidating Partnerships-Deficiency Prior to liquidating their partnership, Pepper and Bain had capital accounts of $15,000 and $58,000, respectively. The partnership assets were sold for $27,000. The partnership had no liabilities. Pepper and Bain share income and losses equally. Required: a. Determine the amount of Pepper's deficiency. 43,000 X b. Determine the amount distributed to Bain, assuming that Pepper is unable to satisfy the deficiency. 43,000 X Feedback Check My Work a. 1. Begin with Pepper's equity prior to liquidation 2 Adjust Pepper's equity for the gain or loss on the sale of the assets. 3. Allocate the gain/loss to partner capital accounts based on equal share. 4. Add beginning equity plus allocated gain/loss to determine liquidation deficiency b. If a partner is unable to satisfy a deficiency, the balance is shared among the remaining partners
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Aa 142.
Transcribed Image Text:Liquidating Partnerships-Deficiency
Prior to liquidating their partnership, Pepper and Bain had capital accounts of $15,000 and $58,000, respectively. The partnership assets were sold for
$27,000. The partnership had no liabilities. Pepper and Bain share income and losses equally.
Required:
4
a. Determine the amount of Pepper's deficiency.
43,000 X
b. Determine the amount distributed to Bain, assuming that Pepper is unable to satisfy the deficiency.
43,000 X
Feedback
Check My Work
a.
1. Begin with Pepper's equity prior to liquidation
2. Adjust Pepper's equity for the gain or loss on the sale of the assets.
3. Allocate the gain/loss to partner capital accounts based on equal share
4. Add beginning equity plus allocated gain/loss to determine liquidation deficiency
b. If a partner is unable to satisfy a deficiency, the balance is shared among the remaining partners
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