The partnership of Ace, Ball, Eaton, and Lake currently holds three assets: Cash,$10,000; Land, $35,000; and Building, $50,000. The partnership has no liabilities.The partners anticipate that expenses required to liquidate their partnership willamount to $5,000. Capital balances are as follows:Ace, capitalBall, capitalEaton, capitalLake, capital$ 25,00028,00020,00022,000The partners share profits and losses as follows: Ace (30 percent), Ball (30 percent),Eaton (20 percent), and Lake (20 percent). If a preliminary distribution of cash is to bemade, what is the amount of safe payment that can be made to each partner? (Donot round intermediate calculations. Round your final answers to the nearestwhole dollar amount.)AceBallEatonLakeSafe payments$ 5,000$5,000$3,333 $3,333

so, ParticularsAceBallEatonLakeReported balances$25,000$28,000$20,000$22,000Maximum losses on land…

Answered: The partnership of Ace, Ball, Eaton,…

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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Assume the G&L partnership forms with cash contributions of $100,000 each from G and L. The partnership then borrows $800,000 on a nonrecourse loan and purchases a building on leased land for $1,000,000. Assume that the building is rented and that annual cash revenues equal cash expenses but depreciation of $50,000 per year results in a $50,000 annual loss. All items of income, loss, and deduction are shared equally. When is the first year that the partnership will record Partnership
The following condensed balance sheet is for the partnership of Miller, Tyson, and Watson, who share profits and losses in the ratio of 6:2:2, respectively: Cash $ 50,000 Liabilities $ 42,000 Other assets 150,000 Miller, capital 69,000 Tyson, capital 69,000 Watson, capital 20,000 Total assets $ 200,000 Total liabilities and capital $ 200,000 a. Assuming no liquidation expenses, calculate the safe payments that can be made to partners at this point in time.
After the tangible assets have been adjusted to current market prices, the capital accounts of Grayson Jackson and Harry Barge have balances of $64,900 and $86,500, respectively. Lewan Gorman is to be admitted to the partnership, contributing $43,300 cash to the partnership, for which he is to receive an ownership equity of $50,500. All partners share equally in income. a. Journalize the entry to record the admission of Gorman, who is to receive a bonus of $7,200. If an amount box does not require an entry, leave it blank. Cash Grayson Jackson, Capital Harry Barge, Capital Lewan Gorman, Capital b. What are the capital balances of each partner after the admission of the new partner? Partner Balance Grayson Jackson $ Harry Barge $ Lewan Gorman $
Jerry and Sherry own and operate a partnership. Jerry’s capital balance is $50,000 and Sherry’s is $55,000. Jerry and Sherry decided to admit a new partner, Allison, to their partnership. By the terms of their partnership agreement, Jerry and Sherry share income/loss equally. Allison intends to contribute $40,000 cash to receive a twenty-five percent interest in the partnership Required: a. Revalue the partnership assets b. Determine the total equity of the partnership after the new partner is admitted c. Determine the new partner share of the total equity d. Determine the bonus resulting from Allison’s equity of her contribution e. Make journal entries to record Allison’s admission to the partnership. Please solve sub-part e. Show Your Work:
Adams, Peters, and Blake share profits and losses for their APB Partnership in a ratio of 2:3:5. When they decide to liquidate, the balance sheet is as follows: Assets Liabilities and Capital $ 49,000 Cash Adams, Loan Other Assets Total Assets 11,800 218,000 Liabilities Adams, Capital Peters, Capital Blake, Capital Total Liabilities and Equities $ 278,800 $ 45,500 64,900 88,500 79,900 $ 278,800 Liquidation expenses are expected to be negligible. No interest accrues on loans with partners after termination of the business. During the liquidation process for the APB Partnership, the following events occurred: 1. During the first month of liquidation, noncash assets with a book value of $89,500 were sold for $68,000, and $22,500 of the liabilities were paid. 2. During the second month, the remaining noncash assets were sold for $78,000. The loan receivable from Adams was collected, and the rest of the creditors were paid. 3. Cash is distributed to partners at the end of each month.…

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