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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.

FINANCIAL ACCOUNTING
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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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
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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