Problem 15-6 (Algo) (LO 15-4) A partnership is considering possible liquidation because one of the partners (Bell) is personally insolvent. Profits and losses are divided on a 4:3:2:1 basis, respectively. Capital balances at the current time are Bell, capital Hardy, capital Dennard, capital Suddath, capital Bell's creditors have filed a $40,000 claim against the partnership's assets. The partnership currently holds assets of $490,000 and liabilities of $193,500. An independent appraiser indicates that the assets can be sold for $285,000. Required: Prepare a statement of partnership liquidation to determine the amount of cash that Bell would receive from the sale of partnership assets. Note: Amounts to be deducted should be entered with a minus sign. Balances Sale of assets Subtotal Pay liabilities Subtotal Allocate deficit Subtotal Distribute cash Ending balances $ $ $ 98,500 84,000 15,000 99,000 EA Cash BELL, HARDY, DENNARD, AND SUDDATH PARTNERSHIP Statement of Partnership Liquidation (Hypothetical) Assets 0 0 $ 0 $ FA 0 6A 0 Liabilities 0 $ 0 0 $ FA CHA 0 0 $ 0 Bell, Capital Hardy, Capital 40% 30% 0 $ 6A EA 0 0 $ 0 $ 6A 0 0 0 0 Dennard, Capital 20% $ FA $ CHA 0 0 Suddath, Capital 10% 0 $ 0 $ EA EA 0
Problem 15-6 (Algo) (LO 15-4) A partnership is considering possible liquidation because one of the partners (Bell) is personally insolvent. Profits and losses are divided on a 4:3:2:1 basis, respectively. Capital balances at the current time are Bell, capital Hardy, capital Dennard, capital Suddath, capital Bell's creditors have filed a $40,000 claim against the partnership's assets. The partnership currently holds assets of $490,000 and liabilities of $193,500. An independent appraiser indicates that the assets can be sold for $285,000. Required: Prepare a statement of partnership liquidation to determine the amount of cash that Bell would receive from the sale of partnership assets. Note: Amounts to be deducted should be entered with a minus sign. Balances Sale of assets Subtotal Pay liabilities Subtotal Allocate deficit Subtotal Distribute cash Ending balances $ $ $ 98,500 84,000 15,000 99,000 EA Cash BELL, HARDY, DENNARD, AND SUDDATH PARTNERSHIP Statement of Partnership Liquidation (Hypothetical) Assets 0 0 $ 0 $ FA 0 6A 0 Liabilities 0 $ 0 0 $ FA CHA 0 0 $ 0 Bell, Capital Hardy, Capital 40% 30% 0 $ 6A EA 0 0 $ 0 $ 6A 0 0 0 0 Dennard, Capital 20% $ FA $ CHA 0 0 Suddath, Capital 10% 0 $ 0 $ EA EA 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem 15-6 (Algo) (LO 15-4)
A partnership is considering possible liquidation because one of the partners (Bell) is personally insolvent. Profits and losses are
divided on a 4:3:2:1 basis, respectively. Capital balances at the current time are
Bell, capital
Hardy, capital
Dennard, capital
Suddath, capital
Bell's creditors have filed a $40,000 claim against the partnership's assets. The partnership currently holds assets of $490,000 and
liabilities of $193,500. An independent appraiser indicates that the assets can be sold for $285,000.
Required:
Prepare a statement of partnership liquidation to determine the amount of cash that Bell would receive from the sale of partnership
assets.
Note: Amounts to be deducted should be entered with a minus sign.
Balances
Sale of assets
Subtotal
Pay liabilities
Subtotal
Allocate deficit
Subtotal
Distribute cash
Ending balances
$ 98,500
84,000
15,000
99,000
$
EA
Cash
BELL, HARDY, DENNARD, AND SUDDATH PARTNERSHIP
Statement of Partnership Liquidation (Hypothetical)
Assets
0
0 $
0 $
0
$
69
0
0
0
$
69
Liabilities
$
0 $
EA
0
0 $
0
Bell, Capital Hardy, Capital
40%
30%
0
$
69
$
0
0
$
0 $
0
LA
$
0
0
0
Dennard,
Capital 20%
$
$
EA
69
0 $
0
Suddath,
Capital 10%
0 $
0
69
$
0 $
0
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