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

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