Accounting
27th Edition
ISBN: 9781337272094
Author: WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher: Cengage Learning,
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Chapter 12, Problem 12.16EX
(a)
To determine
It is that form of organization which is owned and managed by two or more persons who invest and share the profits and losses according to a pre-determined ratio.
To record: The
(b)
To determine
To provide: The journal entry of withdrawal of partner L from the partnership.
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Glen Otis is to retire from the partnership of Otis and Associates as of March 31, the end of the current fiscal year. After closing the accounts, the capital balances of the partners are as follows: Glen Otis $ 200,000; Tammie Sawyer, $125,000; and Joe Parrot, $140,000. They have shared net income and net losses in the ratio 3:2:2. The partners agree that the merchandise inventory should be increased by $15,00, and the allowance for doubtful accounts should be increased by $3,100. Otis agrees to accept a note of $150,000 in partial settlement of his ownership equity. the remainder of his claims is to be paid in cash. Sawyer and Parrot ate to share equally in the net income or net loss of the new partnership.
Journalize the entries to record (a) the adjustment of the assets to bring them into agreement with current market prices and (b) the withdrawal of Otis from the partnership.
March, April, and May have been in partnership for a number of years. The partners allocate all profits and losses on a 2:3:1 basis, respectively. Recently, each partner has become personally insolvent and, thus, the partners have decided to liquidate the business in hopes of remedying their personal financial problems. As of September 1, the partnership’s balance sheet is as follows:
Prepare journal entries for the following transactions:
Sold all inventory for $56,000 cash.
Paid $7,500 in liquidation expenses.
Paid $40,000 of the partnership’s liabilities.
Collected $45,000 of the accounts receivable.
Distributed safe cash balances; the partners anticipate no further liquidation expenses.
Sold remaining accounts receivable for 30 percent of face value.
Sold land, building, and equipment for $17,000.
Paid all remaining liabilities of the partnership.
Distributed cash held by the business to the partners.
On December 31, 2020, the partners of A, B & C LLP, who shared net income and
losses in the ratio of 5 : 3 : 2, respectively, decided to liquidate the partnership. The
partnership trial balance on that date was as follows:
A, B & C LLP Trial Balance, December 31, 2020
Debit
S 18,000
30,000
Credit
Cash
Loan receivable from A
Trade accounts receivable (net)
Inventories
Machinery and equipment (net)
Trade accounts payable
Loan payable to B
А, саpital
В саpital
С, сарital
Totals
The partners planned a lengthy time period for realization of noncash assets in order
to minimize liquidation losses. All available cash, less an amount retained to provide
for future liquidation costs, was to be distributed to the partners at the end of each
month.
Prepare a cash distribution program for A, B &C LLP on December 31, 2020,
showing how cash should be distributed to creditors and to partners as it becomes
available during liquidation. Round amounts to the nearest dollar.
66,000
52,000
189,000
$ 53,000…
Chapter 12 Solutions
Accounting
Ch. 12 - Prob. 1DQCh. 12 - Prob. 2DQCh. 12 - Prob. 3DQCh. 12 - Prob. 4DQCh. 12 - Prob. 5DQCh. 12 - Prob. 6DQCh. 12 - Prob. 7DQCh. 12 - Prob. 8DQCh. 12 - Prob. 9DQCh. 12 - Prob. 10DQ
Ch. 12 - Prob. 12.1APECh. 12 - Prob. 12.1BPECh. 12 - Prob. 12.2APECh. 12 - Prob. 12.2BPECh. 12 - Prob. 12.3APECh. 12 - Prob. 12.3BPECh. 12 - Prob. 12.4APECh. 12 - Prob. 12.4BPECh. 12 - Liquidating partnerships Prior to liquidating...Ch. 12 - Prob. 12.5BPECh. 12 - Prob. 12.6APECh. 12 - Prob. 12.6BPECh. 12 - Revenue per employee Niles and Cohen, CPAs earned ...Ch. 12 - Prob. 12.7BPECh. 12 - Prob. 12.1EXCh. 12 - Prob. 12.2EXCh. 12 - Prob. 12.3EXCh. 12 - Prob. 12.4EXCh. 12 - Prob. 12.5EXCh. 12 - Prob. 12.6EXCh. 12 - Prob. 12.7EXCh. 12 - LLC net income and statement of members equity...Ch. 12 - Prob. 12.9EXCh. 12 - Prob. 12.10EXCh. 12 - Prob. 12.11EXCh. 12 - Prob. 12.12EXCh. 12 - Prob. 12.13EXCh. 12 - Prob. 12.14EXCh. 12 - Prob. 12.15EXCh. 12 - Prob. 12.16EXCh. 12 - Statement of members' equity, admitting new member...Ch. 12 - Distribution of cash upon liquidation Hewitt and...Ch. 12 - Distribution of cash upon liquidation David Oliver...Ch. 12 - Prob. 12.20EXCh. 12 - Prob. 12.21EXCh. 12 - Liquidating partnershipscapital deficiency...Ch. 12 - Prob. 12.23EXCh. 12 - Prob. 12.24EXCh. 12 - Prob. 12.25EXCh. 12 - Revenue per professional staff The accounting firm...Ch. 12 - Revenue per employee Superior Cleaning Services,...Ch. 12 - Prob. 12.1APRCh. 12 - Prob. 12.2APRCh. 12 - Prob. 12.3APRCh. 12 - Prob. 12.4APRCh. 12 - Prob. 12.5APRCh. 12 - Prob. 12.6APRCh. 12 - Prob. 12.1BPRCh. 12 - Prob. 12.2BPRCh. 12 - Prob. 12.3BPRCh. 12 - Prob. 12.4BPRCh. 12 - Prob. 12.5BPRCh. 12 - Statement of partnership liquidation On August 3,...Ch. 12 - Prob. 12.1CPCh. 12 - Prob. 12.3CPCh. 12 - Prob. 12.4CP
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