On August 3, the firm of Chapelle, Rock, and Pryor decided to liquidate its partnership. The partners have capital balances of $61,000, $87,000, and $14,000, respectively. The cash balance is $28,000, the book values of noncash assets total $178,000, and liabilities total $44,000. The partners share income and losses in the ratio of 2:2:1. Required: 1. Prepare a statement of partnership liquidation, covering the period August 3-29, for each of the following independent assumptions: a. All of the noncash assets are sold for $242,000 in cash, the creditors are paid, and the remaining cash is distributed to the partners. Enter any subtractions (balance deficiencies, payments, cash distributions, divisions of loss, sale of assets) as negative numbers using a minus sign. If there is no amount or an amount is zero, enter "0". Chapelle, Rock, and Pryor Statement of Partnership Liquidation For Period August 3-29 Cash Noncash Assets Liabilities Capital Chapelle (2/5) Capital Rock (2/5) Capital Pryor C %3D Balances before realization Sale of assets and division of gain Balances after realization Payment of liabilities Balances after payment of liabilities Cash distributed to partners Final balances

On August 3, the firm of Chapelle, Rock, and Pryor decided to liquidate its partnership. The partners have capital balances of $61,000, $87,000, and $14,000, respectively. The cash balance is $28,000, the book values of noncash assets total $178,000, and liabilities total $44,000. The partners share income and losses in the ratio of 2:2:1. Required: 1. Prepare a statement of partnership liquidation, covering the period August 3-29, for each of the following independent assumptions: a. All of the noncash assets are sold for $242,000 in cash, the creditors are paid, and the remaining cash is distributed to the partners. Enter any subtractions (balance deficiencies, payments, cash distributions, divisions of loss, sale of assets) as negative numbers using a minus sign. If there is no amount or an amount is zero, enter "0". Chapelle, Rock, and Pryor Statement of Partnership Liquidation For Period August 3-29 Cash Noncash Assets Liabilities Capital Chapelle (2/5) Capital Rock (2/5) Capital Pryor C %3D Balances before realization Sale of assets and division of gain Balances after realization Payment of liabilities Balances after payment of liabilities Cash distributed to partners Final balances

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: a. Record the adjustment to the books before the new partner is admitted. b. Assume sparrow invests…

A: Partnership Accounting for admission of new partner

Q: Cash Noncash assets Total assets $ 150,000 280,000 $ 430,000 Liabilities Arch, capital (40%) Bibb,…

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

Q: 42, A, B, C, and D, which share profits in a ratio of S :3:1: 1 respectively, decide to dissolve…

A: Gain on inventory=15000-12000=3000 3000 distribute in PSR i.e.5:3:1:1 and then liability must be…

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: Alpha and Beta are partners who share income in the ratio of 1:2 and have capital balances of…

A: Partnership means where two or more person comes together to run the business and share profit or…

Q: A partnership is currently holding $200,000 in assets and $120,000 in liabilities. The partnership…

A: A partnership is a formal arrangement by two or more parties to manage and operate a business and…

Q: The Field, Brown & Snow are partners and share income and losses equality. The partner decide to…

A: Partnership means where two or more person comes together to run the business and share profit or…

Q: Barber and Atkins are partners in an accounting firm and share net income and loss equally. Barber's…

A: PARTNERSHIP ACCOUNTINGWhen two or more Person come together to form a business & Share Profit…

Q: Required information [The following information applies to the questions displayed below.] Turner,…

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

Q: Jason Rover, Sara Down, and Cam Pret each have a $240,000 capital balance. They share profits and…

A: A journal entry is being used to record a commercial activity in an organization's accounting…

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: After the accounts are closed on February 3, prior to liquidating the partnership, the capital…

A: 1. Notes: i. The loss on sale of noncash assets $23,440 ($32,700 - $56,140) is borne by the…

Q: Barber and Atkins are partners in an accounting firm and share net income and loss equally. Barber's…

A: Closing equity in an partnership firm can be calculated as follows, =Opening equity+Net income…

Q: Jared, Samantha, and Cole each have a $430,000 capital balance. They share profits and losses as…

A: Share of Cole in the Capital = 2/10= 20% = 20% * 430,000= 86,000If the partnership agrees to pay…

Q: Eaton and Hunt have partner capital balances of $202,000 and $178,000, respectively. Eaton receives…

A: Introduction: Journals: Recording of a business transactions in a chronological order. First step in…

Q: e distributed to partn

A: Basic Information In the given question we will first prepare statement of affairs on the date of…

Q: The Field, Brown & Snow are partners and share income and losses equality. The partner decide to…

A: One important aspect of a partnership is that partners have unlimited personal liability for the…

Q: After the accounts are closed on April 10, prior to liquidating the partnership, the capital…

A: Partnerships are popular in a wide range of industries and sectors, from tiny family-owned…

Q: A partnership held three assets: $ 58,000 $ 48,000 $ 65,000 The partners decided to dissolve the…

A: The partnership is a type of agreement formed by two or more individuals to operate and manage a…

Q: B. Higgins, J. Mayo, and N. Rice have capital balances of $93,500, $83,000, and $63,000,…

A: The journal entries are prepared to record the transactions on a regular basis. The bonus is paid to…

Q: A local partnership is liquidating and has only two assets (cash of $10,000 and land with a cost of…

A: a. Calculate the balance of each partner as follows: Formulas:

Q: Capital X, Y, and Z are $10,000 and $8,000 and $10,000, respectively: Profits are divided in the…

A: Partnership is a business in which two or more than two persons agree to carry common business and…

Q: After the accounts are closed on April 10, prior to liquidating the partnership, the capital…

A: Definition of Partnership: Its an agreement between two or more partners to form a business and…

Q: Dividing Partnership Net Income Required: Steve Conyers and Chelsy Stevens formed a partnership,…

A: Partnership refers to the agreement among the partners who have agreed to share profit and losses in…

Q: Kendra, Cogley, and Mel share Income and loss in a 3:21 ratio (in ratio form: Kendra, 3/6; Cogley.…

A: A journal entry is a form of accounting entry that is used to report a business transaction in a…

Q: Brown and Sue share the profits of 30% and 70%, respectively. After all the company partnership…

A: The loss on dissolution needs to be adjusted to the partner's capital account.

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

On August 3, the firm of Chapelle, Rock, and Pryor decided to liquidate its partnership. The partners have capital balances of $61,000, $87,000, and $14,000,
respectively. The cash balance is $28,000, the book values of noncash assets total $178,000, and liabilities total $44,000. The partners share income and losses in the
ratio of 2:2:1.
Required:
1. Prepare a statement of partnership liquidation, covering the period August 3-29, for each of the following independent assumptions:
a. All of the noncash assets are sold for $242,000 in cash, the creditors are paid, and the remaining cash is distributed to the partners. Enter any subtractions (balance
deficiencies, payments, cash distributions, divisions of loss, sale of assets) as negative numbers using a minus sign. If there is no amount or an amount is zero, enter "0".
Chapelle, Rock, and Pryor
Statement of Partnership Liquidation
For Period August 3-29
Cash
Noncash Assets
Liabilities
+ Capital Chapelle (2/5) + Capital Rock (2/5) + Capital Pryor (
Balances before realization
Sale of assets and division of gain
Balances after realization
2$
$
Payment of liabilities
Balances after payment of liabilities
24
$
Cash distributed to partners
Final balances
b. All of the noncash assets are sold for $80,000 in cash, the creditors are paid, the partner with the debit capital balance pays the amount owed to the firm, and the
distributed
Entor any
ationa (ba
onsies
anah distributionscivicions of less

Expert Solution

This question has been solved!

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

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 1 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

After the accounts are closed on February 3, prior to liquidating the partnership, the capital accounts of William Gerloff, Joshua Chu, and Courtney Jewett are $19,580, $4,020, and $22,460, respectively. Cash and noncash assets total $4,980 and $55,980, respectively. Amounts owed to creditors total $14,900. The partners share income and losses in the ratio of 2:1:1. Between February 3 and February 28, the noncash assets are sold for $36,300, the partner with the capital deficiency pays the deficiency to the partnership, and the liabilities are paid. Required: 1. Prepare a statement of partnership liquidation, indicating (a) the sale of assets and division of loss, (b) the payment of liabilities, (c) the receipt of the deficiency (from the appropriate partner), and (d) the distribution of cash. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers…
The partnership of Ace, Ball, Eaton, and Lake currently holds three assets: Cash, $10,000; Land, $35,000; and Building, $50,000. The partnership has no liabilities. The partners anticipate that expenses required to liquidate their partnership will amount to $5,000. Capital balances are as follows: Ace, capital Ball, capital Eaton, capital Lake, capital $ 25,000 28,000 20,000 22,000 The partners share profits and losses as follows: Ace (30 percent), Ball (30 percent), Eaton (20 percent), and Lake (20 percent). If a preliminary distribution of cash is to be made, what is the amount of safe payment that can be made to each partner? (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.) Ace Ball Eaton Lake Safe payments $ 5,000 $ 5,000 $ 3,333 $ 3,333
Required Information [The following information applies to the questions displayed below.] The Fleld, Brown & Snow partnership was begun with Investments by the partners as follows: Field, $131,700; Brown, $165,600; and Snow. $153,700. The partners decide to liquidate, sharlng all losses equally. On May 31, after all assets were sold and all creditors were pald, only $43,900 in partnership cash remalned. 1. Compute the capital account balance of each partner after the liquldation of assets and payment of creditors. (Losses and negative capital balances, If any. should be entered with a minus sign.) Field Brown Snow Total Initial investments Allocation of gains (losses) Capital balances
Partners Shuka, Towyo&Fatis, who share profit and loss in the ratio of 3:5:2, respectively have decided to liquidate their partnership. The statement of financial position of the partnership at the time of Cash 86,300 Accoutns Payable 58,000 other assets 303,700 loans from Towyo 15,500 Shuka, Capital 93,000 Towyo, Capital 95,000 Fatis. Capital 128,500. The partnership is to prepare an instalment distribution schedule showing how cash would be distributed to partners as assets are realized. assuming Partners Shuka, Towyo and Fatis share Profit and Loss equally, the maximum absorbable loss for Shuka would be? assuming Partners Shuka, Towyo and Fatis share Profit and Loss equally, the maximum absorbable loss for Towyo would be? assuming Partners Shuka, Towyo and Fatis share Profit and Loss equally, the maximum absorbable loss for Fatis would be
Hewitt and Patel are partners, sharing gains and losses equally. They decide to terminate their partnership. Prior to realization, their capital balances are $6,000 and $4,000, respectively. After all noncash assets are sold and all liabilities are paid, there is a cash balance of $8,000. Question Content Area a. What is the amount of a gain or loss on realization? $fill in the blank a082cef9b012fe9_2 Question Content Area b. How should the gain or loss be divided between Hewitt and Patel? Hewitt $fill in the blank fe57f5f50043050_2 Patel $fill in the blank fe57f5f50043050_4 Question Content Area c. How should the cash be divided between Hewitt and Patel? If an amount is zero, enter "0". blankHewitt and PatelDistribution of Cash Hewitt Patel Capital balances before realization $fill in the blank 2e3dfe08df82014_1 $fill in the blank 2e3dfe08df82014_2 Division of gain or loss on realization fill in the blank…
Brislin, Humphreys, and Watkins share income and losses in a ratio of 3:2:5, respectively. The capital account balances of the partners are as follows: Brislin Capital $602,000 Humphreys, Capital 368,000 Watkins, Capital 261,000 Prepare the journal entry on the books of the partnership to record the withdrawal of Watkins under the following independent circumstances: The partners agree that Watkins should be paid $221,000 by the partnership for his interest. (Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) Account Titles and Explanation Debit Credit select an account title enter a debit amount enter a credit amount select an account title enter a debit amount enter a credit amount select an account title…
After the accounts are closed on February 3, prior to liquidating the partnership, the capital accounts of William Gerloff, Joshua Chu, and Courtney Jewett are $19,580, $4,020, and $22,460, respectively. Cash and noncash assets total $4,980 and $55,980, respectively. Amounts owed to creditors total $14,900. The partners share income and losses in the ratio of 2:1:1. Between February 3 and February 28, the noncash assets are sold for $36,300, the partner with the capital deficiency pays the deficiency to the partnership, and the liabilities are paid. 1. Prepare a statement of partnership liquidation, indicating (a) the sale of assets and division of loss, (b) the payment of liabilities, (c) the receipt of the deficiency (from the appropriate partner), and (d) the distribution of cash. Be sure to complete the statement heading. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter…
Required information Use the following information for the Exercises below. [The following information applies to the questions displayed below.) Turner, Roth, and Lowe are partners who share income and loss in a 2:3:5 ratio (in percents: Turner, 20%; Roth, 30%; and Lowe, 50% ). The partners decide to liquidate the partnership. Immediately before liquidation, the partnership balance sheet shows total assets, $138,000; total liabilities, $88,000; Turner, Capital, $3,500; Roth, Capital, $14,500; and Lowe, Capital, $32,000. Cash received from selling the assets was sufficient to repay all but $33,000 to the creditors. Exercise 12-14 Liquidation of limited partnership LO P5 Assume that the Turner, Roth, and Lowe partnership is a limited partnership. Turner and Roth are general partners and Lowe is a limited partner. How much should each partner contribute to cover the remaining capital deficiency of $33,000? (Do not round intermediate calculations. Losses and deficits amounts to be…
Adams, Peters, and Blake share profits and losses for their APB Partnership in a ratio of 2:3:5. When they decide to liquidate, the balance sheet is as follows: Assets Liabilities and Capital $ 49,000 Cash Adams, Loan Other Assets Total Assets 11,800 218,000 Liabilities Adams, Capital Peters, Capital Blake, Capital Total Liabilities and Equities $ 278,800 $ 45,500 64,900 88,500 79,900 $ 278,800 Liquidation expenses are expected to be negligible. No interest accrues on loans with partners after termination of the business. During the liquidation process for the APB Partnership, the following events occurred: 1. During the first month of liquidation, noncash assets with a book value of $89,500 were sold for $68,000, and $22,500 of the liabilities were paid. 2. During the second month, the remaining noncash assets were sold for $78,000. The loan receivable from Adams was collected, and the rest of the creditors were paid. 3. Cash is distributed to partners at the end of each month.…
A partnership has the following account balances: Cash, $84,000; Other Assets, $610,000, Liabilities, $374,000; Nixon (50% of profits and losses), $150,000; Cleveland (30%), $100,000; Pierce (20%), $70,000. The company liquidates, and $15,000 becomes available to the partners. Who gets the $15,000? 4- 5- The partnership of W, X, Y, and Z has the following balance sheet: Cash Other assets $50,000 305,000 Liabilities W, capital (50% of profits and losses) X, capital (30%) Y, capital (10%) Z, capital (10%) $ 60,000 80,000 105,000 60,000 50,000 Z is personally insolvent, and one of his creditors is considering suing the partnership for the $25,000 that is currently due. The creditor realizes that liquidation could result from this litigation and does not wish to force such an extreme action unless the creditor is reasonably sure of getting the money that is due. If the partnership sells the other assets, how much money must it receive to ensure that $25,000 would be available from Z's…