The DSV Partnership decided to liquidate as of June 30, 20X5. Its balance sheet as of this date follows:DSV PARTNERSHIPBalance SheetAt June 30, 20X5AssetsCashAccounts Receivable (net)InventoriesProperty, Plant and Equipment (net)Total AssetsLiabilities and Partners' CapitalLiabilities:Accounts PayablePartners' Capital:D, CapitalS, CapitalV, CapitalTotal CapitalTotal Liabilities and CapitalAdditional InformationPersonal assetsPersonal liabilitiesPersonal net worthMonthJuly1. The personal assets (excluding partnership loan and capital interests) and personal liabilities of each partner as of June 30, 20X5,follow:AugustSeptember$ 100,000140,00075,000D$ 250,000(270,000)$ (20,000)JulyAugustSeptemberS$ 450,000(420,000)$ 30,000$ 390,00022,00055,000$ 50,00095,00075,000500,000$ 720,0002. The DSV Partnership was liquidated during the months of July, August, and September. The assets sold and the amounts realizedfollow:Assets SoldInventoriesAccounts receivable (net)Property, plant and equipmentInventories$ 405,000315,000$ 720,000V$ 300,000(240,000)$ 60,000CarryingAmount$ 50,00060,000400,000$ 25,00010,000$ 25,000100,000Accounts receivable (net)Accounts receivable (net)Property, plant and equipment3. The accounts payable of $405,000 was paid in July.Assume the following cash amounts were received during the months of July, August, and September from the sale of DSVPartnership's noncash assets:AmountRealized$ 45,00040,000305,000$ 18,0004,000$ 10,00045,000The partnership wishes to keep $10,000 of cash on hand at the end of both July and August to pay for unexpected liquidationexpenses.It paid liquidation expenses of $2,500 at the end of each month, July, August, and September. D, S, and V share profits and losses inthe ratio 50:30:20, respectively. Prepare a statement as of June 30, 20X5, showing how cash will be distributed among partners as it becomes available.Note: Do not round your intermediate calculations. Round your final answers to nearest whole dollar.Profit and loss sharing ratioPreliquidation capital balancesLoss absorption potential (LAP)Decrease highest LAP to next highest LAP:Decrease SDecrease LAP to next highest level:Decrease SDecrease VDecrease LAPS by distributing cash in the Profitand Loss sharing ratio$$DDSV PARTNERSHIPCash Distribution PlanJune 30, 20X5Loss Absorption PowerS0 $0Distribution of D's deficit%Show Transcribed Text$Profit and loss ratioPreliquidation balances, June 30July loss on disposal of assets and payment of liquidation costsJuly 31 distribution of available cash to partners (Schedule 1) in First layer:August loss on disposal of assets and payment of liquidation costs0 $< Required AAugust 31 distribution of available cash to partners (Schedule 2) Remaininglayer of which paid on July 31Next layer:SVSeptember loss on disposal of assets and payment of liquidation costs0%September 30 distribution of available cash to partners (Schedule 3) Nextlayer of which paid on August 31SVPostliquidation balancesDSV PARTNERSHIPCapital Account BalancesJune 30, 20X5, through September 30, 20X5D$$$$$$$V$0$0Prepare schedules showing how cash is distributed at the end of July, August, and September 20X5.Note: Do not round your intermediate calculations. Round your final answers to nearest whole dollar.%100,00050 %100,000100,000100,000D$100,000$ 100,00050 %$100,000100,000Capital BalancesS30 %$140,000S$140,000$$Required B >140,00030 %$ 140,000100.000 $ 140,000 $140,000 $$ 140,000$ 140,000100,000 $ 140,000100,000 $ 140,000$140,000$$$V20 %$ 75,000$ 75,000V$ 75,00020 %75,00075,00075,00011.175,00075,00075,00075,00075,000

Partnership refers to the agreement between two or more than two persons or entity who agrees to…

Prepare a statement as of June 30, 20X5, showing how cash will be distributed among partners as it becomes available. Note: Do not round your intermediate calculations. Round your final answers to nearest whole dollar. Profit and loss sharing ratio Preliquidation capital balances Loss absorption potential (LAP) Decrease highest LAP to next highest LAP: Decrease S Decrease LAP to next highest level: Decrease S Decrease V Decrease LAPS by distributing cash in the Profit and Loss sharing ratio $ $ D DSV PARTNERSHIP Cash Distribution Plan June 30, 20X5 S V Loss Absorption Power S 0 Distribution of D's deficit 0 $ % $ Show Transcribed Text Profit and loss ratio Preliquidation balances, June 30 July loss on disposal of assets and payment of liquidation costs July 31 distribution of available cash to partners (Schedule 1) in First layer: August loss on disposal of assets and payment of liquidation costs August 31 distribution of available cash to partners (Schedule 2) Remaining layer of which paid on July 31 Next layer: 0 0 September loss on disposal of assets and payment of liquidation costs < Required A % September 30 distribution of available cash to partners (Schedule 3) Next layer of which paid on August 31 S V Postliquidation balances $ DSV PARTNERSHIP Capital Account Balances June 30, 20X5, through September 30, 20X5 D $ $ $ $ $ $ $ $ V Prepare schedules showing how cash is distributed at the end of July, August, and September 20X5. Note: Do not round your intermediate calculations. Round your final answers to nearest whole dollar. 0 $ 0 % 50 % 100,000 100,000 100,000 100,000 $100,000 100,000 $100,000 100,000 $ 100,000 $ 100,000 $ 100,000 D $ 50 % $ Capital Balances $ Required B > $ $ S 140,000 $ $ 140,000 140,000 30 % 140,000 140,000 S $ 140,000 140,000 30 % 140,000 140,000 $ $ $ $ $ $ 140,000 $ 75,000 $ 140,000 $ V 20 % $ 75,000 $ 75,000 V $ 75,000 20 % 75,000 75,000 75,000 75,000 75,000 75,000 75,000

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q