The partnership of Bauer, Ohtani, and Souza has elected to cease all operations and liquidate its business property. A balance sheet drawn up at this time shows the following account balances: Cash Noncash assets. $ 66,000 273,000 Total assets $ 339,000 Liabilities Bauer, capital (608) Ohtani, capital (208) Souza, capital (20%) $ 37,000 165,000 44,000 93,000 Total liabilities and capital $ 339,000 Required: Part A Prepare a predistribution plan for this partnership. Part B The following transactions occur in liquidating this business: 1. Distributed safe payments of cash immediately to the partners, Liquidation expenses of $10,000 are estimated as a basis for this computation. 2. Sold noncash assets with a book value of $112,000 for $66,000. 3. Paid all liabilities. 4. Distributed safe payments of cash again. 5. Sold remaining noncash assets for $60,000. 6. Paid actual liquidation expenses of $8,000 only. 7. Distributed remaining cash to the partners and closed the financial records of the business permanently. Prepare a final statement of liquidation for this partnership using the predistribution plan to determine payments of cash to partners.
The partnership of Bauer, Ohtani, and Souza has elected to cease all operations and liquidate its business property. A balance sheet drawn up at this time shows the following account balances: Cash Noncash assets. $ 66,000 273,000 Total assets $ 339,000 Liabilities Bauer, capital (608) Ohtani, capital (208) Souza, capital (20%) $ 37,000 165,000 44,000 93,000 Total liabilities and capital $ 339,000 Required: Part A Prepare a predistribution plan for this partnership. Part B The following transactions occur in liquidating this business: 1. Distributed safe payments of cash immediately to the partners, Liquidation expenses of $10,000 are estimated as a basis for this computation. 2. Sold noncash assets with a book value of $112,000 for $66,000. 3. Paid all liabilities. 4. Distributed safe payments of cash again. 5. Sold remaining noncash assets for $60,000. 6. Paid actual liquidation expenses of $8,000 only. 7. Distributed remaining cash to the partners and closed the financial records of the business permanently. Prepare a final statement of liquidation for this partnership using the predistribution plan to determine payments of cash to partners.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The partnership of Bauer, Ohtani, and Souza has elected to cease all operations and liquidate its business property. A balance sheet
drawn up at this time shows the following account balances:
Cash
Noncash assets
$ 66,000
273,000
Liabilities
Bauer, capital (60%)
Ohtani, capital (20%)
Souza, capital (20%)
$ 37,000
165,000
44,000
93,000
Total assets
$ 339,000
Total liabilities and capital
$ 339,000
Required:
Part A
Prepare a predistribution plan for this partnership.
Part B
es
The following transactions occur in liquidating this business:
1. Distributed safe payments of cash immediately to the partners. Liquidation expenses of $10,000 are estimated as a basis for this
computation.
2. Sold noncash assets with a book value of $112,000 for $66,000.
3. Paid all liabilities..
4. Distributed safe payments of cash again.
5. Sold remaining noncash assets for $60,000.
6. Paid actual liquidation expenses of $8,000 only.
7. Distributed remaining cash to the partners and closed the financial records of the business permanently.
Prepare a final statement of liquidation for this partnership using the predistribution plan to determine payments of cash to partners.
Part C
Prepare journal entries to record the liquidation transactions reflected in the final statement of liquidation.
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