March, April, and May have been in partnership for a number of years. The partners allocate all profits and losses on a 2:3:1 basis, respectively. Recently, each partner has become personally insolvent and, thus, the partners have decided to liquidate the business in hopes of remedying their personal financial problems. As of September 1, the partnership's balance sheet is as follows: Cash Accounts receivable Inventory Land, building, and equipment (net) Total assets $ 28,000 118,000 97,000 64,000 $ 307,000 a. Sold all inventory for $73,000 cash. b. Paid $12,600 in liquidation expenses. c. Paid $57,000 of the partnership's liabilities. d. Collected $68,000 of the accounts receivable. Liabilities March, capital April, capital May, capital Total liabilities and capital Prepare journal entries for the following transactions: (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Distributed safe payments of cash; the partners antici no further liquidation expenses. f. Sold remaining accounts receivable for 25 percent of face value. g. Sold land, building, and equipment for $34,000. h. Paid all remaining liabilities of the partnership. i. Distributed cash held by the business to the partners. $ 110,000 42,000 92,000 63,000 $ 307,000
March, April, and May have been in partnership for a number of years. The partners allocate all profits and losses on a 2:3:1 basis, respectively. Recently, each partner has become personally insolvent and, thus, the partners have decided to liquidate the business in hopes of remedying their personal financial problems. As of September 1, the partnership's balance sheet is as follows: Cash Accounts receivable Inventory Land, building, and equipment (net) Total assets $ 28,000 118,000 97,000 64,000 $ 307,000 a. Sold all inventory for $73,000 cash. b. Paid $12,600 in liquidation expenses. c. Paid $57,000 of the partnership's liabilities. d. Collected $68,000 of the accounts receivable. Liabilities March, capital April, capital May, capital Total liabilities and capital Prepare journal entries for the following transactions: (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Distributed safe payments of cash; the partners antici no further liquidation expenses. f. Sold remaining accounts receivable for 25 percent of face value. g. Sold land, building, and equipment for $34,000. h. Paid all remaining liabilities of the partnership. i. Distributed cash held by the business to the partners. $ 110,000 42,000 92,000 63,000 $ 307,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
Question
Transcribed Image Text:March, April, and May have been in partnership for a number of years. The partners allocate all profits and losses on a 2:3:1 basis,
respectively. Recently, each partner has become personally insolvent and, thus, the partners have decided to liquidate the business in
hopes of remedying their personal financial problems. As of September 1, the partnership's balance sheet is as follows:
Cash
Accounts receivable
Inventory
Land, building, and equipment (net)
Total assets
a. Sold all inventory for $73,000 cash.
b. Paid $12,600 in liquidation expenses.
$ 28,000
118,000
97,000
64,000
$ 307,000
c. Paid $57,000 of the partnership's liabilities.
d. Collected $68,000 of the accounts receivable.
Prepare journal entries for the following transactions: (Do not round intermediate calculations. If no entry is required for a
transaction/event, select "No journal entry required" in the first account field.)
Liabilities
March, capital
April, capital
May, capital
Total liabilities and capital
e. Distributed safe payments of cash; the partners anticipate no further liquidation expenses.
f. Sold remaining accounts receivable for 25 percent of face value.
g. Sold land, building, and equipment for $34,000.
h. Paid all remaining liabilities of the partnership.
i. Distributed cash held by the business to the partners.
$ 110,000
42,000
92,000
63,000
$ 307,000
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