A partnership has the following account balances at the date of termination: Cash, $80,000; Noncash Assets, $660,000; Liabilities, $320,000; Bell, capital (50 percent of profits and losses), $200,000; Mann, capital (30 percent), $120,000; Scott, capital (20 percent), $100,000. The following transactions occur during liquidation: Noncash assets with a book value of $500,000 are sold for $400,000 in cash.A creditor reduces his claim against the partnership from $120,000 to $100,000, and this amount is paid in cash. The remaining noncash assets are sold for $130,000 in cash.The remaining liabilities of $200,000 are paid in full.Liquidation expenses of $24,000 are paid in cash.Cash remaining after the above transactions have occurred is distributed to the partners.Prepare a statement of partnership liquidation to determine how much cash each partner receives from the liquidation of the partnership. (Amounts to be deducted should be entered with a minus sign.) ### Bell, Mann, and Scott Partnership#### Statement of Partnership LiquidationThis template outlines the steps involved in the liquidation process of the Bell, Mann, and Scott partnership. It provides a detailed financial breakdown of the cash, noncash assets, liabilities, and capital distribution between the partners, Bell, Mann, and Scott. The respective ownership percentages are Bell (50%), Mann (30%), and Scott (20%).| | Cash | Noncash Assets | Liabilities | Bell, Capital (50%) | Mann, Capital (30%) | Scott, Capital (20%) ||-----------------------------------|------|----------------|-------------|---------------------|---------------------|----------------------|| **Beginning balances** | | | | | | || **Sale of noncash assets** | | | | | | || **Pay liabilities** | | | | | | || **Sale of remaining noncash assets**| | | | | | || **Pay remaining liabilities** | | | | | | || **Pay liquidation expenses** | | | | | | || **Subtotal** | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 || **Distribution to partners** | | | | | | || **Ending balances** | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |#### Explanation of the Columns:- **Cash**: This column tracks the partnership's cash balance throughout the liquidation process.- **Noncash Assets**: This column shows the value of noncash assets, which are intended to be liquidated.- **Liabilities**: This column records the partnership's outstanding liabilities to be settled during liquidation.- **Bell, Capital (50%)**: Reflects the proportion of final distributions, gains, or losses attributed to Bell.- **Mann, Capital (30%)**: Reflects the proportion of final distributions, gains, or losses attributed to Mann.- **Scott, Capital (20%)**: Reflects the proportion of final distributions, gains, or losses attributed to Scott.During

Partnership- A partnership is a formal agreement between two or more people to manage and operate a…

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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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A partnership has the following account balances at the date of termination: Cash, $80,000; Noncash Assets, $660,000; Liabilities, $320,000; Bell, capital (50 percent of profits and losses), $200,000; Mann, capital (30 percent), $120,000; Scott, capital (20 percent), $100,000. The following transactions occur during liquidation:

Noncash assets with a book value of $500,000 are sold for $400,000 in cash.
A creditor reduces his claim against the partnership from $120,000 to $100,000, and this amount is paid in cash.
The remaining noncash assets are sold for $130,000 in cash.
The remaining liabilities of $200,000 are paid in full.
Liquidation expenses of $24,000 are paid in cash.
Cash remaining after the above transactions have occurred is distributed to the partners.

Prepare a statement of partnership liquidation to determine how much cash each partner receives from the liquidation of the partnership. (Amounts to be deducted should be entered with a minus sign.)

### Bell, Mann, and Scott Partnership
#### Statement of Partnership Liquidation

This template outlines the steps involved in the liquidation process of the Bell, Mann, and Scott partnership. It provides a detailed financial breakdown of the cash, noncash assets, liabilities, and capital distribution between the partners, Bell, Mann, and Scott. The respective ownership percentages are Bell (50%), Mann (30%), and Scott (20%).

| | Cash | Noncash Assets | Liabilities | Bell, Capital (50%) | Mann, Capital (30%) | Scott, Capital (20%) |
|-----------------------------------|------|----------------|-------------|---------------------|---------------------|----------------------|
| **Beginning balances** | | | | | | |
| **Sale of noncash assets** | | | | | | |
| **Pay liabilities** | | | | | | |
| **Sale of remaining noncash assets**| | | | | | |
| **Pay remaining liabilities** | | | | | | |
| **Pay liquidation expenses** | | | | | | |
| **Subtotal** | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
| **Distribution to partners** | | | | | | |
| **Ending balances** | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |

#### Explanation of the Columns:
- **Cash**: This column tracks the partnership's cash balance throughout the liquidation process.
- **Noncash Assets**: This column shows the value of noncash assets, which are intended to be liquidated.
- **Liabilities**: This column records the partnership's outstanding liabilities to be settled during liquidation.
- **Bell, Capital (50%)**: Reflects the proportion of final distributions, gains, or losses attributed to Bell.
- **Mann, Capital (30%)**: Reflects the proportion of final distributions, gains, or losses attributed to Mann.
- **Scott, Capital (20%)**: Reflects the proportion of final distributions, gains, or losses attributed to Scott.

During

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