!Required information[The following information applies to the questions displayed below.]The partnership of Garcia, Iglesias, and Kassabian was formed several years ago as a local tax preparation firm. Twopartners have reached retirement age, and the partners have decided to terminate operations and liquidate the business.Liquidation expenses of $44,000 are expected. The partnership balance sheet at the start of liquidation is as follows:CashAccounts receivableOffice equipment (net)Building (net)LandTotal assetsLiabilitiesGarcia, loan$ 180,00040,000100,00040,000120,000$ 40,00070,00060,000Garcia, capital (25%)160,000150,000$ 480,000Total liabilities and capital$ 480,000Iglesias, capital (25%)Kassabian, capital (50%)Required:Prepare a predistribution plan for this partnership.Garcia, Loanand CapitalIglesias,CapitalKassabian,CapitalBeginning balances$140,000 $ 40,000 $ 120,000Assumed loss of Schedule 140,00040,000(80,000)Step one balances$100,000 $0$ 40,000Assumed loss of Schedule 20(40,000)Step two balances$60,000 $0$0

Partnership -A partnership is a type of corporate structure in which two or more individuals…

The partnership of Garcia, Iglesias, and Kassabian was formed several years ago as a local tax preparation firm. Two partners have reached retirement age, and the partners have decided to terminate operations and liquidate the business. Liquidation expenses of $44,000 are expected. The partnership balance sheet at the start of liquidation is as follows: Cash Accounts receivable Office equipment (net) Building (net) Land Total assets $ 40,000 70,000 Liabilities Garcia, loan 60,000 Garcia, capital (25%) 160,000 Iglesias, capital (25%) 150,000 Kassabian, capital (50%) $ 480,000 Total liabilities and capital $ 180,000 40,000 100,000 40,000 120,000 $480,000

The partnership of Garcia, Iglesias, and Kassabian was formed several years ago as a local tax preparation firm. Two partners have reached retirement age, and the partners have decided to terminate operations and liquidate the business. Liquidation expenses of $44,000 are expected. The partnership balance sheet at the start of liquidation is as follows: Cash Accounts receivable Office equipment (net) Building (net) Land Total assets $ 40,000 70,000 Liabilities Garcia, loan 60,000 Garcia, capital (25%) 160,000 Iglesias, capital (25%) 150,000 Kassabian, capital (50%) $ 480,000 Total liabilities and capital $ 180,000 40,000 100,000 40,000 120,000 $480,000

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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