Accounting (Text Only)
26th Edition
ISBN: 9781285743615
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 12, Problem 12.25EX
a.
To determine
Limited Liability Company
It is that form of organization which is formed as a legal entity that provides limited liability to the owners. It has a common seal.
To prepare: The statement of LLC liquidation
b.
To determine
To record: The
c.
To determine
To explain: The role of the income and loss sharing ratio in liquidating an LLC.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Statement of LLC Liquidation
Lester, Torres, and Hearst are members of Arcadia Sales, LLC, sharing income and losses in the ratio of 2:2:1, respectively. The members decide to liquidate the limited liability company. The members' equity prior to liquidation and asset realization on August 1 are as follows:
Lester
$16,000
Torres
37,100
Hearst
23,000
Total
$76,100
In winding up operations during the month of August, noncash assets with a book value of $100,200 are sold for $124,200, and liabilities of $33,200 are satisfied. Prior to realization, Arcadia Sales has a cash balance of $9,100.
a. Prepare a statement of LLC liquidation. Enter any subtractions (balance deficiencies, payments, cash distributions, divisions of loss, sale of assets) as negative numbers using a minus sign. If an amount is zero, enter "o".
Arcadia Sales, LLC
Statement of LLC Liquidation
For the Period August 1-31
Member
Member
Member
Equity
Equity
Equity
Noncash
Lester (2/5) + Torres (2/5) + Hearst (1/5)
Cash +…
Statement of LLC Liquidation
Lester, Torres, and Hearst are members of Arcadia Sales, LLC, sharing income and losses in the ratio of 2:2:1, respectively. The members decide to liquidate the limited liability company. The members' equity prior to liquidation and asset realization on August 1 are as follows:
Lester
$28,100
Torres
65,000
Hearst
40,400
Total
$133,500
In winding up operations during the month of August, noncash assets with a book value of $175,800 are sold for $218,000, and liabilities of $56,500 are satisfied. Prior to realization, Arcadia Sales has a cash balance of $14,200.
a. Prepare a statement of LLC liquidation. Enter any subtractions (balance deficiencies, payments, cash distributions, divisions of loss, sale of assets) as negative numbers using a minus sign. If an amount is zero, enter "0".
Arcadia Sales, LLC
Statement of LLC Liquidation
For the Period August 1-31
Cash +
NoncashAssets =
Liabilities +
MemberEquityLester (2/5) +…
Statement of LLC Liquidation
Lester, Torres, and Hearst are members of Arcadia Sales, LLC, sharing income and losses in the ratio of 2:2:1, respectively. The members decide to liquidate the limited liability company. The members' equity prior to liquidation and asset realization on August 1 are as follows:
Lester
$28,100
Torres
65,000
Hearst
40,400
Total
$133,500
In winding up operations during the month of August, noncash assets with a book value of $175,800 are sold for $218,000, and liabilities of $56,500 are satisfied. Prior to realization, Arcadia Sales has a cash balance of $14,200.
a. Prepare a statement of LLC liquidation. Enter any subtractions (balance deficiencies, payments, cash distributions, divisions of loss, sale of assets) as negative numbers using a minus sign. If an amount is zero, enter "0".
Arcadia Sales, LLC
Statement of LLC Liquidation
For the Period August 1-31
Cash +
NoncashAssets =
Liabilities +
MemberEquityLester (2/5) +…
Chapter 12 Solutions
Accounting (Text Only)
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 - Prob. 12.5APECh. 12 - Prob. 12.5BPECh. 12 - Prob. 12.6APECh. 12 - Prob. 12.6BPECh. 12 - Prob. 12.7APECh. 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 - Prob. 12.8EXCh. 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 - Prob. 12.17EXCh. 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. 12.21EXCh. 12 - Prob. 12.22EXCh. 12 - Liquidating partnershipscapital deficiency...Ch. 12 - Prob. 12.24EXCh. 12 - Prob. 12.25EXCh. 12 - Prob. 12.26EXCh. 12 - Prob. 12.27EXCh. 12 - Prob. 12.28EXCh. 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. 12.2CPCh. 12 - Revenue per employee The following table shows key...Ch. 12 - Prob. 12.4CP
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- STATEMENT OF PARTNER SHIP LIQUIDATION WITH LOSS After several years of operations, the partnership of Delco, Smith, and Walker is to be liquidated. After making closing entries on March 31, 20--, the following accounts remain Open. The noncash assets are sold for 165,000. Profits and losses are shared equally. REQUIRED 1. Prepare a statement of partnership liquidation for the period April 115, 20--, showing the following: (a) The sale of noncash assets on April 1 (b) The allocation of any gain or loss to the partners on April 1 (c) The payment of the liabilities on April 12 (d) The distribution of cash to the partners on April 15 2. Journalize these four transactions in a general journal.arrow_forwardENTRIES: PARTNERSHIP LIQUIDATION On liquidation of the partnership of J. Hui and K. Cline, as of November 1, 20--, inventory with a book value of 180,000 is sold for 230,000. Given that Hui and Cline share profits and losses equally, prepare the entries for the sale and the allocation of gain.arrow_forwardliquidate their business on September 30, 20xx. The following is the condensed profits and losses at a rate of 50%, 30% and 20% respectively. They decided to Terrence, Theodore and Thomas are partners in Toys4U Company: They sbare in Exercise 4. Installment Liquidation statement of financial position prior to liquidation: Toys4U Company Statement of Financial Position As at September 30, 20xx Liabilities and Capital Assets P 103,000 64,000 Cash P 43,450 Liabilities Terrence, Loan Terrence, Capital Theodore, Capital Thomas, Capital Total Liabilities and Capital P 538.400 Non-cash Assets 494,950 131,250 43,800 196,350 Total Assets P 538,400 The following data relate to the realization of non-cash assets: Вook Cash Liquidation Expenses Paid Liabilities Withheld P 9,600 Unrecorded Cash Value Realized October P197,600 P160,950 168,000 29,600 P12,400 P24,000 6,400 November 265,350 11,200 1,600 December 32,000 1,600 Required: 1. Statement of Liquidation from October to December 20xx. 2.…arrow_forward
- Do not give answer in imagearrow_forwardLester, Torres, and Hearst are members of Arcadia Sales, LLC, sharing income and losses in the ratio of 2:2:1, respectively. The members decide to liquidate the limited liability company. The members' equity prior to liquidation and asset realization on August 1 are as follows: Lester $28,800 Torres 66,600 Hearst 41,400 Total $136,800 In winding up operations during the month of August, noncash assets with a book value of $180,000 are sold for $223,200, and liabilities of $58,800 are satisfied. Prior to realization, Arcadia Sales has a cash balance of $15,600.arrow_forwardSCA partnership has the following account balances before liquidation: Cash 70,000 Liabilities 225,000 NCA 1,475,000 Loan to C 30,000 Loan from A 10,000 Receivable from S 4,000 Expenses 446,000 S, Capital (4) 250,000 C, Capital (4) 380,000 A, Capital (2) 200,000 Revenues 960,000 During May, some noncash assets were sold that resulted to a loss of 9,225. Liquidation expenses of 35,000 were paid and additional expenses amounting to 18,000 were expected to be incurred through the following months of liquidating the partnership. Liabilities to outsiders amounting to 175,000 were paid. What is the book value of the noncash assets sold for C to received 111,110?arrow_forward
- A-1arrow_forwardSTATEMENT OF PARTNER SHIP LIQUIDATION WITH LOSS After several years of operations, the partnership of Nelson, Pope, and Williams is to be liquidated. After making closing entries on March 31, 20--, the following accounts remain open: REQUIRED 1. Prepare a statement of partnership liquidation for the period July 120, 20--, showing the following: (a) The sale of noncash assets on July 1 (b) The allocation of any gain or loss to the partners on July 1 (c) The payment of the liabilities on July 15 (d) The distribution of cash to the partners on July 20 2. Journalize these four transactions in a general journal.arrow_forwardCALCULATION QUESTION At June 30 (5 years later), SANDY HAIR AND NAILS's is liquidated. Just before the liquidation, SANDY HAIR AND NAILS's has cash of $2.800, equipment of $45,000, accumulated amortization of $31,000, accounts payable of $6.000, and the following partner capital accounts: S. Chen $9.000; A. Liu $1.800. The partners at this time share in income or losses equally. Upon liquidation, the equipment is sold for $10,000 cash, the accounts payable are paid in full, and any remaining cash is distributed to the partners. If a partner's capital account is in a deficit balance, he or she will contribute the necessary cash to the partnership to cover it. Calculate how much cash will be paid to, or received from, each partner upon liquidation. Show your work. SHORT ANSWER When Sunny admitted Andy as a partner, he paid a bonus to Sunny. Why do you think that Andy was willing to do this? Under what circumstances would Sunny pay a bonus to Andy?arrow_forward
- Lump-Sum Liquidation with Loss on Realizationarrow_forwardWhat is the loss on realization resulting to a capital deficiency to a personnally solvent partnerassume that NCA was sold at 1,700,000arrow_forwardStatement of partnership liquidation Eli, Joe, and Ned agree to liquidate their consulting practice as soon as possible after the close of business on July 31, 2016. The trial balance on that date shows the following account balances: Debit Credit Cash $13,000 Accounts Receivable 12,000 Furniture and Fixtures 35,000 Accounts Payable $6,000 Eli Capital 24,000 Joe Capital 15,000 Ned Capital 15,000 $60,000 $60,000 The partners share profits and losses 20 percent, 30 percent, and 50 percent to Eli, Joe, and Ned, respectively, after Ned is allowed a monthly salary of $4,000. August…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,