Advanced Accounting
14th Edition
ISBN: 9781260247824
Author: Joe Ben Hoyle, Thomas F. Schaefer, Timothy S. Doupnik
Publisher: RENT MCG
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Chapter 15, Problem 7P
To determine
Identify the correct option for finding the amount of cash that each partner receives as a result of the liquidation.
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A partnership has the following balance sheet prior to liquidation (partners' profit and loss ratios are in parentheses):
$ 33,000
100,000
Cash
Other assets
Total
$ 133,000
Beginning balances
Sale of assets
Pay liabilites
Pay liquidation expenses
Subtotal
Distribution to partners
Ending balances
Liabilities
Playa, capital (40%)
Bahia, capital (30%)
Arco, capital (30%)
Total
During liquidation, other assets are sold for $80,000, liabilities are paid in full, and $15,000 in liquidation expenses are paid.
Required:
Prepare a statement of partnership liquidation to determine the amount of cash each partner receives as a result of this liquidation.
Note: Amounts to be deducted should be entered with a minus sign.
PLAYA, BAHIA, AND ARCO PARTNERSHIP
Statement of Partnership Liquidation
Other Assets Liabilities
$ 50,000
24,000
29,000
30,000
$ 133,000
Cash
Playa, Capital Bahia, Capital Arco, Capital
(40%)
(30%)
(30%)
The ABC Partnership is to be liquidated. The ledger shows the following:
Cash $ 70,000
Noncash Assets 220,000
Liabilities 90,000
A, Capital 85,000
B, Capital 90,000
C, Capital 25,000
A,B, and C's income ratios are 5:3:2, respectively. The non-cash assets are sold for $170,000.
Instructions
Prepare a schedule of liquidation using the following chart:
Cash NC assets Liabilities A, Cap B, Cap C, Cap
Beg Balance
Sale of assets
Balance
Pay liabilities
Balance
Distribute cash
End Balance
Prepare the 4…
A, B and C partnership is being liquidated. The current balance sheet is shown here:
Cash
25,000
Other assets
120,000
Accounts payable
A, Capital (30%)
B, Capital (406)
C, Capital (30%)
40,000
31,000
65,000
9,000
Required: Prepare a schedule of partnership liquidation for each of the following independent cases:
a. Non-cash assets are sold for P60,000, and any partner with a deficit is unable to eliminate any of
the deficit.
b. Non-cash assets are sold for P60,000, and any partners with a deficit is able to invest cash equal
to the amount of the deficit.
c. Non-cash assets are sold for P50,000, and any partner with a deficit is able to invest up to
P8,000 cash in the partnership.
Chapter 15 Solutions
Advanced Accounting
Ch. 15 - Prob. 1QCh. 15 - Prob. 2QCh. 15 - Prob. 3QCh. 15 - Prob. 4QCh. 15 - What is the purpose of a statement of liquidation?...Ch. 15 - Prob. 1PCh. 15 - Prob. 2PCh. 15 - Prob. 3PCh. 15 - Prob. 4PCh. 15 - A partnership is considering possible liquidation...
Ch. 15 - What is a predistribution plan? a. A list of the...Ch. 15 - Prob. 7PCh. 15 - Prob. 8PCh. 15 - Prob. 9PCh. 15 - Prob. 10PCh. 15 - Prob. 11PCh. 15 - Prob. 12PCh. 15 - Prob. 13PCh. 15 - Prob. 14PCh. 15 - Prob. 15PCh. 15 - Prob. 16PCh. 15 - Prob. 17PCh. 15 - Prob. 18PCh. 15 - Prob. 25PCh. 15 - Prob. 26PCh. 15 - March, April, and May have been in partnership for...Ch. 15 - Prob. 28PCh. 15 - Prob. 29P
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