Answered: The Field, Brown & Snow are partners…

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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Question

The Field, Brown & Snow are partners and share income and losses equality. The partner decide to liquidate the partnership when their capital balances are as follows: Field, $130,800; Brown, $167,100; and Snow, $153,800. On May 31, the liquidation resulted in a loss of $406,200.

2. Assume that the partner with a deficit pays cash to cover the deficit. make the journal entries on May 31 to record (a) the cash received to cover the deficit and (b) the final disbursement of cash to the partners.

Beginning Inventory
Purchases:
January 9
January 25
Total
Cost of Goods Available for Sale
Cost of Goods
Available for
Sale
# of
units
Cost per
unit
Periodic FIFO
Cost of Goods Sold
# of units
sold
Cost per
unit
Cost of
Goods Sold
Inventory Balance
Cost per
unit
# of units
in ending
inventory
Ending
Inventory

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement 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, and drawings of a partner.

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