Required: Prepare a statement of partnership liquidation to determine the amount of cash that Bell would receive from the sale of partnership assets.
Required: Prepare a statement of partnership liquidation to determine the amount of cash that Bell would receive from the sale of partnership assets.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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Transcribed Image Text: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 $23,000 claim against the partnership's assets. The partnership currently holds assets of $320,000 and
llabilities of $110,000. An Independent appraiser indicates that the assets can be sold for $200,000.
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 labilities
Subtotal
Allocate deficit
Subtotal
Distribute cash
Ending balances
$
$
3
$ 55,000
58,000
15,000
82,000
$
$
Cash
BELL, HARDY DENNARD, AND SUDDATH PARTNERSHIP
Statement of Partnership Liquidation (Hypothetical)
Bell, Capital
40%
55,000
48.000
103.000
103.000 $
S 103.000 $
103,000 $
Assets
0
Liabilities
10. $
0 $
$
10
03
03
R$
0
0
Hardy, Capital
30%
$
10 $
Q $
10
0
10
0
Dennard,
Capital 20%
S
5
S
0
Suddath,
Capital 10%
OS
0 $
3
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