Accounting, Chapters 1-13
27th Edition
ISBN: 9781337272100
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 12, Problem 12.6APR
1. 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.
Liquidating Partnership
The winding up of process of partnership is called liquidation of partnership. At the time of liquidation of partnership, loss on realization or gain on realization is determined.
To prepare: A statement of partnership liquidation.
2. a
To determine
To record: The
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Statement of Partnership Liquidation
After the accounts are closed on February 3, prior to liquidating the partnership, the capital accounts of William Gerloff, Joshua Chu, and Courtney Jewett are $19,680, $4,960, and $21,840, respectively. Cash and noncash assets total $5,100 and $56,140, respectively. Amounts owed to creditors total $14,760. The partners share income and losses in the ratio of 2:1:1. Between February 3 and February 28, the noncash assets are sold for $32,700, the partner with the capital deficiency pays the deficiency to the partnership, and the liabilities are paid.
CHART OF ACCOUNTS
Gerloff, Chu, and Jewett
General Ledger
ASSETS
110
Cash
111
Petty Cash
112
Accounts Receivable
113
Allowance for Doubtful Accounts
114
Interest Receivable
115
Notes Receivable
116
Inventory
117
Supplies
118
Office Supplies
119
Prepaid Insurance
120
Land
123
Building
124
Accumulated Depreciation-Building
125
Equipment
126
Accumulated…
On November 1, the firm of Sails, Welch, and Greenberg decided to liquidate its partnership. The partners have capital balances of $58,000, $72,000, and $10,000, respectively. The cash balance is $32,000, the book values of noncash assets total $128,000, and liabilities total $20,000. The partners share income and losses in the ratio of 2:2:1.
Instructions
1. Prepare a statement of partnership liquidation, covering the period November 1–30,for each of the following independent assumptions:a. All of the noncash assets are sold for $156,000 in cash, the creditors are paid, and the remaining cash is distributed to the partners.b. All of the noncash assets are sold for $55,000 in cash, the creditors are paid, the partner with the debit capital balance pays the amount owed to the firm, and the remaining cash is distributed to the partners.2. Assume that the partner with the capital deficiency in part (b) declares bankruptcy and is unable to pay the deficiency. Journalize the entries to (a)…
On August 3, the firm of Chapelle, Rock, and Pryor decided to liquidate its partnership. The partners have capital balances of $14,000, $102,000, and $86,000, respectively. The cash balance is $65,000, the book values of noncash assets total $167,000, and liabilities total $30,000. The partners share income and losses in the ratio of 1:2:2.
Instructions
1. Prepare a statement of partnership liquidation, covering the period August 3–29, for each of the following independent assumptions:a. All of the noncash assets are sold for $217,000 in cash, the creditors are paid, and the remaining cash is distributed to the partners.b. All of the noncash assets are sold for $72,000 in cash, the creditors are paid, the partner with the debit capital balance pays the amount owed to the firm, and the remaining cash is distributed to the partners.2. Assume that the partner with the capital deficiency in part (b) declares bankruptcy and is unable to pay the deficiency. Journalize the entries to (a)…
Chapter 12 Solutions
Accounting, Chapters 1-13
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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