Loose Leaf For Fundamental Accounting Principles Format: Loose-leaf
24th Edition
ISBN: 9781260158557
Author: Wild
Publisher: Mcgraw Hill Publishers
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Chapter 12, Problem 6APSA
To determine
To prepare:
Expert Solution
Explanation of Solution
Journal entries for liquidation of partnership are as follows:
| S.No. | Accounts titles and Explanation | Debit | Credit |
| (a) | Sale of inventory: | ||
| Cash | $ 500,000.00 | ||
| Loss on Sale | $ 37,200.00 | ||
| Inventory | $ 537,200.00 | ||
| (Being inventory sold for cash) | |||
| (b) | Allocation of Gain or loss: | ||
| Kendra's Capital | $ 18,600.00 | ||
| Cogley's Capital | $ 12,400.00 | ||
| Mei's Capital | $ 6,200.00 | ||
| Loss on Sale | $ 37,200.00 | ||
| (Being loss shared by partners in the income sharing ratio) | |||
| (c) | Payment of Liabilities at book value: | ||
| Accounts Payable | $ 245,500.00 | ||
| Cash | $ 245,500.00 | ||
| (being liabilities paid at their book value) | |||
| (d) | Distribution of cash: | ||
| Kendra's Capital | $ 74,400.00 | ||
| Cogley's Capital | $ 200,100.00 | ||
| Mei's Capital | $ 160,800.00 | ||
| Cash | $ 435,300.00 | ||
| (Being Cash distributed to partners) |
Working Note:
The distribution of cash is calculated as follows:
| Kendra | Cogley | Mei | Total | |
| Cash | $180,800.00 | |||
| Add: Sale of Inventory | $500,000.00 | |||
| Less: Payment of Liabilities | $(245,500.00) | |||
| Net Cash Available | $ 435,300.00 | |||
| Partner's Capital | $93,000.00 | $212,500.00 | $167,000.00 | $472,500.00 |
| Less: Loss on Sale (Shared in the Ratio 3:2:1) | $ (18,600.00) | $ (12,400.00) | $(6,200.00) | $(37,200.00) |
| Capital Balance/ (Deficit) | $74,400.00 | $200,100.00 | $160,800.00 | $435,300.00 |
| Distribution of Cash | $74,400.00 | $ 200,100.00 | $ 160,800.00 | $ 435,300.00 |
Requirement-3:
To determine
To prepare:
Journal entries for liquidation of partnership when inventory is sold for $320,000 and the partner with deficit bring it in cash
Expert Solution
Explanation of Solution
Journal entries for liquidation of partnership are as follows:
| S.No. | Accounts titles and Explanation | Debit | Credit |
| (a) | Sale of inventory: | ||
| Cash | $ 320,000.00 | ||
| Loss on Sale | $ 217,200.00 | ||
| Inventory | $ 537,200.00 | ||
| (Being inventory sold for cash) | |||
| (b) | Allocation of Gain or loss: | ||
| Kendra's Capital | $ 108,600.00 | ||
| Cogley's Capital | $ 72,400.00 | ||
| Mei's Capital | $ 36,200.00 | ||
| Loss on Sale | $ 217,200.00 | ||
| (Being loss shared by partners in the income sharing ratio) | |||
| (c) | Payment of Liabilities at book value: | ||
| Accounts Payable | $ 245,500.00 | ||
| Cash | $ 245,500.00 | ||
| (being liabilities paid at their book value) | |||
| (d) | Distribution of cash: | ||
| Cogley's Capital | $ 140,100.00 | ||
| Mei's Capital | $ 130,800.00 | ||
| Kendra's Capital | $ 15,600.00 | ||
| Cash | $ 255,300.00 | ||
| (Being Cash distributed to partners) |
Working Note:
The distribution of cash is calculated as follows:
| Kendra | Cogley | Mei | Total | |
| Cash | $180,800.00 | |||
| Add: Sale of Inventory | $320,000.00 | |||
| Less: Payment of Liabilities | $(245,500.00) | |||
| Net Cash Available | $ 255,300.00 | |||
| Partner's Capital | $93,000.00 | $212,500.00 | $167,000.00 | $472,500.00 |
| Less: Loss on Sale (Shared in the Ratio 3:2:1) | $ (108,600.00) | $ (72,400.00) | $ (36,200.00) | $(217,200.00) |
| Capital Balance/ (Deficit) | $ (15,600.00) | $140,100.00 | $130,800.00 | $255,300.00 |
| Distribution of Cash | $ (15,600.00) | $ 140,100.00 | $ 130,800.00 | $ 255,300.00 |
Requirement-4:
To determine
To prepare:
Journal entries for liquidation of partnership when inventory is sold for $320,000 and the partner with deficit bring it in cash
Expert Solution
Explanation of Solution
Journal entries for liquidation of partnership are as follows:
| S.No. | Accounts titles and Explanation | Debit | Credit |
| (a) | Sale of inventory: | ||
| Cash | $ 250,000.00 | ||
| Loss on Sale | $ 287,200.00 | ||
| Inventory | $ 537,200.00 | ||
| (Being inventory sold for cash) | |||
| (b) | Allocation of Gain or loss: | ||
| Kendra's Capital | $ 143,600.00 | ||
| Cogley's Capital | $ 95,733.33 | ||
| Mei's Capital | $ 47,866.67 | ||
| Loss on Sale | $ 287,200.00 | ||
| (Being loss shared by partners in the income sharing ratio) | |||
| (c) | Payment of Liabilities at book value: | ||
| Accounts Payable | $ 245,500.00 | ||
| Cash | $ 245,500.00 | ||
| (being liabilities paid at their book value) | |||
| (d) | Distribution of cash: | ||
| Cogley's Capital | $ 83,033.33 | ||
| Mei's Capital | $ 102,266.67 | ||
| Cash | $ 185,300.00 | ||
| (Being Cash distributed to partners) |
Working Note:
The distribution of cash is calculated as follows:
| Kendra | Cogley | Mei | Total | |
| Cash | $180,800.00 | |||
| Add: Sale of Inventory | $250,000.00 | |||
| Less: Payment of Liabilities | $(245,500.00) | |||
| Net Cash Available | $ 185,300.00 | |||
| Partner's Capital | $93,000.00 | $212,500.00 | $167,000.00 | $472,500.00 |
| Less: Loss on Sale (Shared in the Ratio 3:2:1) | $ (143,600.00) | $ (95,733.33) | $ (47,866.67) | $(287,200.00) |
| Capital Balance/ (Deficit) | $ (50,600.00) | $116,766.67 | $119,133.33 | $185,300.00 |
| Sharing of Deficit pf Kendra's Capital (In the ratio 2:1) | $50,600.00 | $ (33,733.33) | $ (16,866.67) | |
| Distribution of Cash | $- | $83,033.33 | $ 102,266.67 | $ 185,300.00 |
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Chapter 12 Solutions
Loose Leaf For Fundamental Accounting Principles Format: Loose-leaf
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 - Kay, Kat, and Kim are partners. In a liquidation,...
Ch. 12 - Prob. 11DQCh. 12 - Prob. 12DQCh. 12 - Prob. 1QSCh. 12 - Prob. 3QSCh. 12 - Prob. 5QSCh. 12 - Prob. 6QSCh. 12 - Prob. 7QSCh. 12 - QS 12-9
Liquidation of partnership
P5
The Field,...Ch. 12 - Prob. 10QSCh. 12 - Prob. 1ECh. 12 - Prob. 2ECh. 12 - Prob. 3ECh. 12 - Prob. 4ECh. 12 - Prob. 5ECh. 12 - Prob. 6ECh. 12 - Prob. 7ECh. 12 - Prob. 8ECh. 12 - Prob. 9ECh. 12 - Prob. 10ECh. 12 - Prob. 11ECh. 12 - Prob. 12ECh. 12 - Prob. 13ECh. 12 - Prob. 14ECh. 12 - Prob. 15ECh. 12 - Prob. 1APSACh. 12 - Prob. 2APSACh. 12 - Prob. 3APSACh. 12 - Prob. 4APSACh. 12 - Prob. 5APSACh. 12 - Prob. 6APSACh. 12 - Prob. 1BPSBCh. 12 - Prob. 2BPSBCh. 12 - Prob. 5BPSBCh. 12 - Prob. 6BPSBCh. 12 - Prob. 12SPCh. 12 - Prob. 1AACh. 12 - Prob. 2AACh. 12 - Prob. 3AACh. 12 - Prob. 1BTNCh. 12 -
BTN 12-4 Assume that you are studying for an...Ch. 12 - BTN 12-3 Access the 2017 10-K of Advanced...Ch. 12 - Prob. 4BTNCh. 12 - Prob. 5BTN
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