plan for this partnership. ns transpire during the liquidation of the Wingler, Norris, Rodgers, and Guthrie partnership: of the total accounts receivable with the rest judged to be uncollectible. g, and equipment for $165,000. ents of cash. who has become personally insolvent, will make no further contributions. $75,000. ents of cash again. expenses of $12,000 only. ursements to the partners based on the assumption that all partners other than Guthrie are personally solvent.
plan for this partnership. ns transpire during the liquidation of the Wingler, Norris, Rodgers, and Guthrie partnership: of the total accounts receivable with the rest judged to be uncollectible. g, and equipment for $165,000. ents of cash. who has become personally insolvent, will make no further contributions. $75,000. ents of cash again. expenses of $12,000 only. ursements to the partners based on the assumption that all partners other than Guthrie are personally solvent.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The partnership of Wingler, Norris, Rodgers, and Guthrie was formed several years ago as a local architectural firm. Several partners
have recently undergone personal financial problems and have decided to terminate operations and liquidate the business. The
following balance sheet is drawn up as a guideline for this process:
Cash
Accounts receivable
Inventory
Land
Building and equipment (net)
Total assets
$ 45,000
112,000
131,000
100,000
183,000
$571,000
Liabilities
Rodgers, loan
Wingler, capital (30%)
Norris, capital (10%)
Rodgers, capital (20%)
Guthrie, capital (40%)
Total liabilities and capital
When the liquidation commenced, liquidation expenses of $18,000 were anticipated as being necessary to dispose of all property.
Part A
Prepare a predistribution plan for this partnership.
$ 64,000
65,000
165,000
118,000
89,000
70,000
$571,000
Part B
The following transactions transpire during the liquidation of the Wingler, Norris, Rodgers, and Guthrie partnership:
1. Collected 90 percent of the total accounts receivable with the rest judged to be uncollectible.
2. Sold the land, building, and equipment for $165,000.
3. Distributed safe payments of cash.
4. Learned that Guthrie, who has become personally insolvent, will make no further contributions.
5. Paid all liabilities.
6. Sold all inventory for $75,000.
7. Distributed safe payments of cash again.
8. Paid actual liquidation expenses of $12,000 only.
9. Made final cash disbursements to the partners based on the assumption that all partners other than Guthrie are personally solvent.
Prepare journal entries to record these liquidation transactions.
Transcribed Image Text:Prepare a predistribution plan for this partnership. (Do not round intermediate calculations.)
Rodgers,
Loan
Beginning balances
Assumed loss of Schedule 1
Step one balances
Assumed loss of Schedule 2
Step two balances
Assumed loss of Schedule 3
Step three balances
No
1
2
3
4
5
6
7
8
9
10
Transaction
01
02
03
04
05
06
07
08
9.a
Wingler, Norris,
Capital
Capital
9.b
$
$
$
0 $
0
0
Prepare journal entries to record these liquidation transactions. (Do not round intermediate calculations. Round the final
answers to nearest dollar amounts. If no entry is required for a particular transaction/event, select "No journal entry required"
in the first account field.)
Guthrie, Capital
Norris, Capital
Rodgers, Loan
Norris, Capital
Liabilities
Cash
Rodgers, Capital
Wingler, Capital
Cash
Accounts receivable
Rodgers, Capital
Wingler, Capital
Cash
Cash
Wingler, Capital
Norris, Capital
Rodgers, Capital
Guthrie, Capital
Land
Building and equipment
Cash
Guthrie, Capital
Norris, Capital
No journal entry required
Rodgers, Capital
Wingler, Capital
Inventory
$
Norris, Capital
Rodgers, Capital
Wingler, Capital
Cash
$
Guthrie, Capital
Norris, Capital
Rodgers, Capital
Wingler, Capital
Cash
Norris, Capital
Rodgers, Capital
Wingler, Capital
Guthrie, Capital
Norris, Capital
Rodgers, Capital
Wingler, Capital
Cash
0
0
0
$
< Required A
and
Capital
$
$
0
0
< Required A
0
General Journal
Guthrie,
Capital
I$
$
$
0
0
0
Required B >
Required B
* ***** ******* ******
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✔
✓
✓
✓
✓
✔
✔
✔
✓
♥
✔✓
✓
✔
✔
♥
✔
✓
✔
✓
✓
Debit
Credit
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