hslbj The partnership of Wing, Mehta, Rodgers, and Yan was formed several years ago asa local architectural firm. Several partners have recently undergone personal financialproblems and have decided to terminate operations and liquidate the business. Thefollowing balance sheet is drawn up as a guideline for this process:CashAccounts receivableInventoryLandBuilding and equipment (net)Total assets$ 47,000114,000133,000LiabilitiesRodgers, loanWing, capital (30%)101,000Mehta, capital (10%)184,000Rodgers, capital (20%)Yan, capital (40%)$579,000Total liabilities and capital$ 63,00067,000168,000120,00090,00071,000$579,000When the liquidation commenced, liquidation expenses of $14,000 were anticipatedas being necessary to dispose of all property.Required:Part APrepare a predistribution plan for this partnership.Part BThe following transactions transpire during the liquidation of the Wing, Mehta,Rodgers, and Yan partnership:1. Collected 90 percent of the total accounts receivable with the rest judged to beuncollectible.2. Sold the land, building, and equipment for $166,000.3. Distributed safe payments of cash.4. Learned that Yan, who has become personally insolvent, will make no furthercontributions.5. Paid all liabilities.6. Sold all inventory for $87,000.7. Distributed safe payments of cash again.8. Paid actual liquidation expenses of $8,000 only.9. Made final cash disbursements to the partners based on the assumption that allpartners other than Yan are personally solvent.Prepare journal entries to record these liquidation transactions.Complete this question by entering your answers in the tabs below.Part APart BPrepare a predistribution plan for this partnership.Note: Do not round intermediate calculations.Wing, Mehta,Capital CapitalRodgers,Loan andCapitalYan,CapitalBeginning balancesAssumed loss of Schedule 1Step one balances$0$0$0 $0Assumed loss of Schedule 2Step two balances$0$0$0$0Assumed loss of Schedule 3Step three balances$0$0$0$0< Part APart B>

The process of closing a business and distributing its assets is called liquidation. The assets are…

Answered: Required: Part A Prepare a…

Required: Part A Prepare a predistribution plan for this partnership. Part B The following transactions transpire during the liquidation of the Wing, Mehta, Rodgers, and Yan partnership:

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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Concept explainers

Partnership Accounting

A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.

Partner Admission and Withdrawal

A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.

Question

hslbj

The partnership of Wing, Mehta, Rodgers, and Yan 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
$ 47,000
114,000
133,000
Liabilities
Rodgers, loan
Wing, capital (30%)
101,000
Mehta, capital (10%)
184,000
Rodgers, capital (20%)
Yan, capital (40%)
$579,000
Total liabilities and capital
$ 63,000
67,000
168,000
120,000
90,000
71,000
$579,000
When the liquidation commenced, liquidation expenses of $14,000 were anticipated
as being necessary to dispose of all property.
Required:
Part A
Prepare a predistribution plan for this partnership.
Part B
The following transactions transpire during the liquidation of the Wing, Mehta,
Rodgers, and Yan 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 $166,000.
3. Distributed safe payments of cash.
4. Learned that Yan, who has become personally insolvent, will make no further
contributions.
5. Paid all liabilities.
6. Sold all inventory for $87,000.
7. Distributed safe payments of cash again.
8. Paid actual liquidation expenses of $8,000 only.
9. Made final cash disbursements to the partners based on the assumption that all
partners other than Yan are personally solvent.
Prepare journal entries to record these liquidation transactions.
Complete this question by entering your answers in the tabs below.
Part A
Part B
Prepare a predistribution plan for this partnership.
Note: Do not round intermediate calculations.
Wing, Mehta,
Capital Capital
Rodgers,
Loan and
Capital
Yan,
Capital
Beginning balances
Assumed loss of Schedule 1
Step one balances
$
0
$
0
$
0 $
0
Assumed loss of Schedule 2
Step two balances
$
0
$
0
$
0
$
0
Assumed loss of Schedule 3
Step three balances
$
0
$
0
$
0
$
0
< Part A
Part B
>

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