Partnership Liquidation-Safe Payments Several years ago, Ann Dennis, Jill Edwards, Lee Lacy, and Sarah Ingram formed a partnership to operate the Deli Sisters Cafe. Rerouting of bus lines caused declines in patronage to the extent that the partners have agreed to dissolve the partnership and liquidate the assets. The November 2, 2014, balance sheet of the Deli Sisters Cafe and other data appear below. The partnership agreement did not specify how profits and losses were to be shared. DELI SISTERS CAFÉ Balance Sheet November 2, 2014 $75,000 Liabilities Cash Supplies 37,500 Loan-Ingram Equipment. 375,000 Capital-Dennis Fixtures 100,000 Capital-Edwards $125,250 50,000 130,000 112,500 49,750 Capital-Lacy Capital-Ingram 120,000 Total assets $587,500 Total liabilities and capital $587,500 Additional information: 1. During November, sold half of the fixtures for $12,500. Sold equipment with a book value of $75,000 for $55,000. 2. During December, paid all outside creditors. A neighboring restaurant bought Deli Sisters Cafe's supplies at 80 percent of cost. Sold the remaining fixtures for $20,000. 3. During January, sold equipment with a book value of $100,000 for $70,000.

Partnership Liquidation-Safe Payments Several years ago, Ann Dennis, Jill Edwards, Lee Lacy, and Sarah Ingram formed a partnership to operate the Deli Sisters Cafe. Rerouting of bus lines caused declines in patronage to the extent that the partners have agreed to dissolve the partnership and liquidate the assets. The November 2, 2014, balance sheet of the Deli Sisters Cafe and other data appear below. The partnership agreement did not specify how profits and losses were to be shared. DELI SISTERS CAFÉ Balance Sheet November 2, 2014 $75,000 Liabilities Cash Supplies 37,500 Loan-Ingram Equipment. 375,000 Capital-Dennis Fixtures 100,000 Capital-Edwards $125,250 50,000 130,000 112,500 49,750 Capital-Lacy Capital-Ingram 120,000 Total assets $587,500 Total liabilities and capital $587,500 Additional information: 1. During November, sold half of the fixtures for $12,500. Sold equipment with a book value of $75,000 for $55,000. 2. During December, paid all outside creditors. A neighboring restaurant bought Deli Sisters Cafe's supplies at 80 percent of cost. Sold the remaining fixtures for $20,000. 3. During January, sold equipment with a book value of $100,000 for $70,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

2. The sale of the non-cash assets resulted in a total loss ofA. P70,000b. P60,000c.P65,000 d. P80.000e. answer not given
Please don't provide answer in image format thank you Terrilson Trading is a company in the business of manufacturing parts for train wagons. Terri and Nilson formed this company in 2015 after they were both retrenched from their employment. The following information pertains to the business activities of the partnership for the year ended 31 August 2022. Extract from the statement of financial position as at 31 August 2022: 2022 2021 R R Land and buildings (at cost) 1,010,600 660,600 Equipment (at cost) 624,900 569,400 Accumulated depreciation: Equipment 175,200 74,400 Long-term loan 283,600 198,200 Members’ contributions 1,276,500 1,080,100 Retained earnings 231,200 79,700 Loans to members 98,100 34,100 Loans from members 118,700 - Distribution to members payable 78,200 108,600 Inventory 59,100 33,200 Dividend receivable 21,600 101,200 Trade payables control 137,000 66,900 Accrued security expenses 7,700 3,400 Current tax payable 62,200 40,000 Accrued rental income 6,200…
Liquidating Partnerships Prior to liquidating their partnership, Fowler and Ericson had capital accounts of $26,000 and $51,000, respectively. Prior to liquidation, the partnership had no cash assets other than what was realized from the sale of assets. These partnership assets were sold for $93,000. The partnership had $4,000 of liabilities. Fowler and Ericson share income and losses equally. Determine the amount received by Fowler as a final distribution from liquidation of the partnership.$fill in the blank 1
Incredible and Joyful are partners who share profit on a 60:40 ratio. At the end of 2021, the partnership books showed a net income of P150,000. It was disclosed however that the following errors and omissions were noted (see image below). How much is the corrected net income in 2021?
Please don't use chatgpt answer and do not give solution in image format
The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its business property. A balance sheet drawn up at this time shows the following account balances: Cash $ 60,000 Liabilities $ 40,000 Noncash assets 219,000 Frick, capital (60%) 129,000 Wilson, capital (20%) 35,000 Clarke, capital (20%) 75,000 Total assets $279,000 Total liabilities and capital $279,000 Part A Prepare a predistribution plan for this partnership. Part B The following transactions occur in liquidating this business: Distributed safe payments of cash immediately to the partners. Liquidation expenses of $8,000 are estimated as a basis for this computation. Sold noncash assets with a book value of $94,000 for $60,000. Paid all liabilities. Distributed safe payments of cash again. Sold remaining noncash assets for $51,000. Paid actual liquidation expenses of $6,000 only. Distributed remaining cash to the partners and closed the financial records of the business permanently.…
On September 23, 2021 – Pepsi and Coke have both decided to dissolve and liquidate their partnership. The balance sheet/statement of financial position on that date is as follows in the given picture. Required: 1. Prepare the cash priority program. 2. Prepare the liquidation journal entries and the statement of liquidation.
Derek Howat, Gina Rosales, and Amin Karem formed a partnership 10 years ago called HRK LLP, which reports under ASPE. Derek, Gina, and Amin are working on the 2020 year-end financial reporting for the partnership, and Derek announced that he would like to retire as of the year end. The partnership agreement states that upon retirement, a partner will receive $225,000 in cash for their one-third ownership interest. No revaluations to partnership assets are required before Derek’s withdrawal. Before recording the year-end adjustments for salary, interest, and income, the individual capital accounts of the partners at December 31, 2020, were as follows: Capital, Derek $155,000 Capital, Gina $215,000 Capital, Amin $130,000 HRK LLP had income for 2020 of $86,000 and according to the partnership agreement, profits should be split 2:3:1 between Derek, Gina, and Amin. A salary of $30,000 was paid to Derek during 2020, and interest is accrued on the opening capital…
The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its business property. A balance sheet drawn up at this time shows the following account balances: Cash $ 64,000 Liabilities $ 44,000 Noncash assets 225,000 Frick, capital (60%) 132,000 Wilson, capital (20%) 36,000 Clarke, capital (20%) 77,000 Total assets $ 289,000 Total liabilities and capital $ 289,000 Part A Prepare a predistribution plan for this partnership. Part B The following transactions occur in liquidating this business: Distributed safe payments of cash immediately to the partners. Liquidation expenses of $9,000 are estimated as a basis for this computation. Sold noncash assets with a book value of $96,000 for $64,000. Paid all liabilities. Distributed safe payments of cash again. Sold remaining noncash assets for $52,000. Paid actual liquidation expenses of $7,000 only. Distributed remaining cash to the…
! Required information [The following information applies to the questions displayed below.] The partnership of Garcia, Iglesias, and Kassabian was formed several years ago as a local tax preparation firm. Two partners have reached retirement age, and the partners have decided to terminate operations and liquidate the business. Liquidation expenses of $44,000 are expected. The partnership balance sheet at the start of liquidation is as follows: Cash Accounts receivable Office equipment (net) Building (net) Land Total assets Liabilities Garcia, loan $ 180,000 40,000 100,000 40,000 120,000 $ 40,000 70,000 60,000 Garcia, capital (25%) 160,000 150,000 $ 480,000 Total liabilities and capital $ 480,000 Iglesias, capital (25%) Kassabian, capital (50%) Required: Prepare a predistribution plan for this partnership. Garcia, Loan and Capital Iglesias, Capital Kassabian, Capital Beginning balances $ 140,000 $ 40,000 $ 120,000 Assumed loss of Schedule 1 40,000 40,000 (80,000) Step one balances $…
The capital account balances and profit and loss sharing ratios of the (A), (B), (C) and (D) partnership on December 31, 2014, after closing entries are as follows: Partner (A) (? %) $100,000 partner (B) (20%) $100,000 Partner (C) (10%) $40,000 partner (D) (20%) $60,000 Partner (B) is retiring from the partnership, and the partners agree that he will receive a cash payment of $120,000 in final settlement of his interest. The journal entry to record partner (B) retirement assuming that the partners agree about assets non-revaluation. a. Dr. (B) capital $120,000/Cr. Cash $120,000. a. Dr. (B) capital $120,000/Cr. Cash $120,000. b. Dr. (A) capital $17,500, (B) capital $90,000, (C) capital $4,500, (D) capital $8,000, /Cr. Cash $120,000. b. Dr. (A) capital $17,500, (B) capital $90,000, (C) capital $4,500, (D) capital $8,000, /Cr. Cash $120,000. c. Dr. (A) capital $12,500, (B) capital $100,000, (C) capital $2,500, (D) capital $5,000, /Cr. Cash…
A-7