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

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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