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Required: Prepare proposed schedules of liquidation on January 31, February 28, and March 31 to determine the safe payments made to the partners at the end of each of these three months.

Required: Prepare proposed schedules of liquidation on January 31, February 28, and March 31 to determine the safe payments made to the partners at the end of each of these three months.

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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On January 1, the partners of Mori, Lux, and Khan (who share profits and losses in the ratio of 53.2, respectively) decide to terminate operations and liquidate their partnership. The trial balance at this date follows: General Journal Cash Accounts receivable Inventory Debit $24,000 Credit Machinery and equipment, net Mori, loan Accounts payable Lux, loan Mori, capital Lux, capital Khan, capital Totals 78,000 64.000 227,000 42,000 $77,000 32,000 124,000 $409,000 96,000 80.000 $409,000 The partners plan a program of piecemeal conversion of the partnership's assets to minimize liquidation losses. All available cash, less an amount retained to provide for future expenses, is to be distributed to the partners at the end of each month. A summary of the liquidation transactions follows: January February March Collected $57,000 of the accounts receivable, the balance is deemed uncollectible Received $44,000 for the entire inventory Paid $8,000 in liquidation expenses Paid $66,000 to the outside creditors after offsetting a $9,000 credit memorandum received by the partnership on January 11. Retained $16,000 cash in the business at the end of January to cover liquidation expenses. The remainder is distributed to the partners Paid $9,000 in liquidation expenses. Retained $4,000 cash in the business at the end of the month to cover additional liquidation expenses Received $152,000 on the sale of all machinery and equipment Paid $11,000 in final liquidation expenses. Retained no cash in the business. Required: Prepare proposed schedules of liquidation on January 31, February 28, and March 31 to determine the safe payments made to the partners at the end of each of these three months. Complete this question by entering your answers in the tabs below. January February March Prepare proposed schedule of liquidation to determine the safe payments made to the partners at the end of January Note: Amounts to be deducted should be entered with a minus sign. MORI, LUX, AND KHAN PARTNERSHIP Proposed Schedule of Liquidation Balances January 11 Collected accounts receivable Sold inventory Paid liquidation expenses Paid accounts payable Subtotal (actual balances) Maximum loss on assets Maximum liquidation expenses January 31 Mori, Capital Lux, Capital Cash Noncash Assets Liabilities and Loan and Loan 50% 30% Khan, Capital 20% 0 0 이 Subtotal (potential balances) 0 $ 0 0 0 Allocation of deficit capital balance Safe payments to partners - January 31 OS 0 $ 05 0 $ 0 $ 0
Transcribed Image Text:On January 1, the partners of Mori, Lux, and Khan (who share profits and losses in the ratio of 53.2, respectively) decide to terminate operations and liquidate their partnership. The trial balance at this date follows: General Journal Cash Accounts receivable Inventory Debit $24,000 Credit Machinery and equipment, net Mori, loan Accounts payable Lux, loan Mori, capital Lux, capital Khan, capital Totals 78,000 64.000 227,000 42,000 $77,000 32,000 124,000 $409,000 96,000 80.000 $409,000 The partners plan a program of piecemeal conversion of the partnership's assets to minimize liquidation losses. All available cash, less an amount retained to provide for future expenses, is to be distributed to the partners at the end of each month. A summary of the liquidation transactions follows: January February March Collected $57,000 of the accounts receivable, the balance is deemed uncollectible Received $44,000 for the entire inventory Paid $8,000 in liquidation expenses Paid $66,000 to the outside creditors after offsetting a $9,000 credit memorandum received by the partnership on January 11. Retained $16,000 cash in the business at the end of January to cover liquidation expenses. The remainder is distributed to the partners Paid $9,000 in liquidation expenses. Retained $4,000 cash in the business at the end of the month to cover additional liquidation expenses Received $152,000 on the sale of all machinery and equipment Paid $11,000 in final liquidation expenses. Retained no cash in the business. Required: Prepare proposed schedules of liquidation on January 31, February 28, and March 31 to determine the safe payments made to the partners at the end of each of these three months. Complete this question by entering your answers in the tabs below. January February March Prepare proposed schedule of liquidation to determine the safe payments made to the partners at the end of January Note: Amounts to be deducted should be entered with a minus sign. MORI, LUX, AND KHAN PARTNERSHIP Proposed Schedule of Liquidation Balances January 11 Collected accounts receivable Sold inventory Paid liquidation expenses Paid accounts payable Subtotal (actual balances) Maximum loss on assets Maximum liquidation expenses January 31 Mori, Capital Lux, Capital Cash Noncash Assets Liabilities and Loan and Loan 50% 30% Khan, Capital 20% 0 0 이 Subtotal (potential balances) 0 $ 0 0 0 Allocation of deficit capital balance Safe payments to partners - January 31 OS 0 $ 05 0 $ 0 $ 0
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