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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 January February $ March Debit 36,000 102,000 88,000 225,000 66,000 $ 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: Credit 95,000 56,000 166,000 108,000 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 creditors after offsetting a $5,000 credit memorandum received by the partnership on January 11. Retained $28,000 cash in the business at the end of January to cover liquidation. expenses. The remainder is distributed to the partners. Paid $5,000 in liquidation expenses. Retained $16,000 cash in the business at the end of the month to cover additional liquidation expenses. Received $164,000 on the sale of all machinery and equipment.

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 January February $ March Debit 36,000 102,000 88,000 225,000 66,000 $ 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: Credit 95,000 56,000 166,000 108,000 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 creditors after offsetting a $5,000 credit memorandum received by the partnership on January 11. Retained $28,000 cash in the business at the end of January to cover liquidation. expenses. The remainder is distributed to the partners. Paid $5,000 in liquidation expenses. Retained $16,000 cash in the business at the end of the month to cover additional liquidation expenses. Received $164,000 on the sale of all machinery and equipment.

FINANCIAL ACCOUNTING
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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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 February March 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 creditors after offsetting a $5,000 credit memorandum received by the partnership on January 11. Retained $28,000 cash in the business at the end of January to cover liquidation expenses. The remainder is distributed to the partners. Paid $5,000 in liquidation expenses. Retained $16,000 cash in the business at the end of the month to cover additional liquidation expenses. Received $164,000 on the sale of all machinery and equipment. Paid $7,000 in final liquidation expenses. Retained no cash in the business. Prepare proposed schedules of liquidation on January 31, February 28, and March 31 to determine the safe payments made to the partners at the end of each of these three months.
Transcribed Image Text: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 February March 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 creditors after offsetting a $5,000 credit memorandum received by the partnership on January 11. Retained $28,000 cash in the business at the end of January to cover liquidation expenses. The remainder is distributed to the partners. Paid $5,000 in liquidation expenses. Retained $16,000 cash in the business at the end of the month to cover additional liquidation expenses. Received $164,000 on the sale of all machinery and equipment. Paid $7,000 in final liquidation expenses. Retained no cash in the business. Prepare proposed schedules of liquidation on January 31, February 28, and March 31 to determine the safe payments made to the partners at the end of each of these three months.
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 creditors after offsetting a $5,000 credit memorandum received by the partnership on January 11. Retained $28,000 cash in the business at the end of January to cover liquidation expenses. The remainder is distributed to the partners. Paid $5,000 in liquidation expenses. Retained $16,000 cash in the business at the end of the month to cover additional liquidation expenses. Received $164,000 on the sale of all machinery and equipment.
Transcribed Image Text: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 creditors after offsetting a $5,000 credit memorandum received by the partnership on January 11. Retained $28,000 cash in the business at the end of January to cover liquidation expenses. The remainder is distributed to the partners. Paid $5,000 in liquidation expenses. Retained $16,000 cash in the business at the end of the month to cover additional liquidation expenses. Received $164,000 on the sale of all machinery and equipment.
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