Lump-sum liquidations: liquidation of partnership in which all assets are converted into cash within a short time, creditors are paid, and a single lump-sum payment is made to the partners for their capital interests. Partnership may experiences losses on disposal of assets, because it has to make offer below the normal selling price to encourage immediate sales. The partnership attempts to collect receivable has to offer large cash discounts for prompt payments. Any goodwill on the partnership books is generally written off when the partnership begins liquidation because it is no longer a going concern. In some situations a deficit may occur in a partner’s capital account if its credit balance is too low to absorb share of losses, such deficit may be cleared by either partner investing cash or other asset or the partner’s capital deficit is distributed to the other partners in their resulting loss sharing ratio. Requirement 1 The statement of realization and liquidation for CDG on December 10, 20X6.

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Answer 1

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Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

Chapter 16, Problem 16.13P

a

To determine

Lump-sum liquidations: liquidation of partnership in which all assets are converted into cash within a short time, creditors are paid, and a single lump-sum payment is made to the partners for their capital interests. Partnership may experiences losses on disposal of assets, because it has to make offer below the normal selling price to encourage immediate sales. The partnership attempts to collect receivable has to offer large cash discounts for prompt payments. Any goodwill on the partnership books is generally written off when the partnership begins liquidation because it is no longer a going concern.

In some situations a deficit may occur in a partner’s capital account if its credit balance is too low to absorb share of losses, such deficit may be cleared by either partner investing cash or other asset or the partner’s capital deficit is distributed to the other partners in their resulting loss sharing ratio.

Requirement 1

The statement of realization and liquidation for CDG on December 10, 20X6.

b

To determine

Lump-sum liquidations: liquidation of partnership in which all assets are converted into cash within a short time, creditors are paid, and a single lump-sum payment is made to the partners for their capital interests. Partnership may experiences losses on disposal of assets, because it has to make offer below the normal selling price to encourage immediate sales. The partnership attempts to collect receivable has to offer large cash discounts for prompt payments. Any goodwill on the partnership books is generally written off when the partnership begins liquidation because it is no longer a going concern.

In some situations a deficit may occur in a partner’s capital account if its credit balance is too low to absorb share of losses, such deficit may be cleared by either partner investing cash or other asset or the partner’s capital deficit is distributed to the other partners in their resulting loss sharing ratio.

Requirement 2

The schedule of the net worth of each partner after liquidation.

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Answer 2

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Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

Chapter 16, Problem 16.13P

a

To determine

Lump-sum liquidations: liquidation of partnership in which all assets are converted into cash within a short time, creditors are paid, and a single lump-sum payment is made to the partners for their capital interests. Partnership may experiences losses on disposal of assets, because it has to make offer below the normal selling price to encourage immediate sales. The partnership attempts to collect receivable has to offer large cash discounts for prompt payments. Any goodwill on the partnership books is generally written off when the partnership begins liquidation because it is no longer a going concern.

In some situations a deficit may occur in a partner’s capital account if its credit balance is too low to absorb share of losses, such deficit may be cleared by either partner investing cash or other asset or the partner’s capital deficit is distributed to the other partners in their resulting loss sharing ratio.

Requirement 1

The statement of realization and liquidation for CDG on December 10, 20X6.

b

To determine

Lump-sum liquidations: liquidation of partnership in which all assets are converted into cash within a short time, creditors are paid, and a single lump-sum payment is made to the partners for their capital interests. Partnership may experiences losses on disposal of assets, because it has to make offer below the normal selling price to encourage immediate sales. The partnership attempts to collect receivable has to offer large cash discounts for prompt payments. Any goodwill on the partnership books is generally written off when the partnership begins liquidation because it is no longer a going concern.

In some situations a deficit may occur in a partner’s capital account if its credit balance is too low to absorb share of losses, such deficit may be cleared by either partner investing cash or other asset or the partner’s capital deficit is distributed to the other partners in their resulting loss sharing ratio.

Requirement 2

The schedule of the net worth of each partner after liquidation.

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Answer 3

Question

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

Chapter 16, Problem 16.13P

a

To determine

Lump-sum liquidations: liquidation of partnership in which all assets are converted into cash within a short time, creditors are paid, and a single lump-sum payment is made to the partners for their capital interests. Partnership may experiences losses on disposal of assets, because it has to make offer below the normal selling price to encourage immediate sales. The partnership attempts to collect receivable has to offer large cash discounts for prompt payments. Any goodwill on the partnership books is generally written off when the partnership begins liquidation because it is no longer a going concern.

In some situations a deficit may occur in a partner’s capital account if its credit balance is too low to absorb share of losses, such deficit may be cleared by either partner investing cash or other asset or the partner’s capital deficit is distributed to the other partners in their resulting loss sharing ratio.

Requirement 1

The statement of realization and liquidation for CDG on December 10, 20X6.

b

To determine

Lump-sum liquidations: liquidation of partnership in which all assets are converted into cash within a short time, creditors are paid, and a single lump-sum payment is made to the partners for their capital interests. Partnership may experiences losses on disposal of assets, because it has to make offer below the normal selling price to encourage immediate sales. The partnership attempts to collect receivable has to offer large cash discounts for prompt payments. Any goodwill on the partnership books is generally written off when the partnership begins liquidation because it is no longer a going concern.

In some situations a deficit may occur in a partner’s capital account if its credit balance is too low to absorb share of losses, such deficit may be cleared by either partner investing cash or other asset or the partner’s capital deficit is distributed to the other partners in their resulting loss sharing ratio.

Requirement 2

The schedule of the net worth of each partner after liquidation.

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Answer 4

Question

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

Chapter 16, Problem 16.13P

a

To determine

Lump-sum liquidations: liquidation of partnership in which all assets are converted into cash within a short time, creditors are paid, and a single lump-sum payment is made to the partners for their capital interests. Partnership may experiences losses on disposal of assets, because it has to make offer below the normal selling price to encourage immediate sales. The partnership attempts to collect receivable has to offer large cash discounts for prompt payments. Any goodwill on the partnership books is generally written off when the partnership begins liquidation because it is no longer a going concern.

In some situations a deficit may occur in a partner’s capital account if its credit balance is too low to absorb share of losses, such deficit may be cleared by either partner investing cash or other asset or the partner’s capital deficit is distributed to the other partners in their resulting loss sharing ratio.

Requirement 1

The statement of realization and liquidation for CDG on December 10, 20X6.

b

To determine

Lump-sum liquidations: liquidation of partnership in which all assets are converted into cash within a short time, creditors are paid, and a single lump-sum payment is made to the partners for their capital interests. Partnership may experiences losses on disposal of assets, because it has to make offer below the normal selling price to encourage immediate sales. The partnership attempts to collect receivable has to offer large cash discounts for prompt payments. Any goodwill on the partnership books is generally written off when the partnership begins liquidation because it is no longer a going concern.

In some situations a deficit may occur in a partner’s capital account if its credit balance is too low to absorb share of losses, such deficit may be cleared by either partner investing cash or other asset or the partner’s capital deficit is distributed to the other partners in their resulting loss sharing ratio.

Requirement 2

The schedule of the net worth of each partner after liquidation.

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Answer 5

Chapter 16, Problem 16.13P

a

To determine

Lump-sum liquidations: liquidation of partnership in which all assets are converted into cash within a short time, creditors are paid, and a single lump-sum payment is made to the partners for their capital interests. Partnership may experiences losses on disposal of assets, because it has to make offer below the normal selling price to encourage immediate sales. The partnership attempts to collect receivable has to offer large cash discounts for prompt payments. Any goodwill on the partnership books is generally written off when the partnership begins liquidation because it is no longer a going concern.

In some situations a deficit may occur in a partner’s capital account if its credit balance is too low to absorb share of losses, such deficit may be cleared by either partner investing cash or other asset or the partner’s capital deficit is distributed to the other partners in their resulting loss sharing ratio.

Requirement 1

The statement of realization and liquidation for CDG on December 10, 20X6.

b

To determine

Lump-sum liquidations: liquidation of partnership in which all assets are converted into cash within a short time, creditors are paid, and a single lump-sum payment is made to the partners for their capital interests. Partnership may experiences losses on disposal of assets, because it has to make offer below the normal selling price to encourage immediate sales. The partnership attempts to collect receivable has to offer large cash discounts for prompt payments. Any goodwill on the partnership books is generally written off when the partnership begins liquidation because it is no longer a going concern.

In some situations a deficit may occur in a partner’s capital account if its credit balance is too low to absorb share of losses, such deficit may be cleared by either partner investing cash or other asset or the partner’s capital deficit is distributed to the other partners in their resulting loss sharing ratio.

Requirement 2

The schedule of the net worth of each partner after liquidation.

Answer 6

Chapter 16, Problem 16.13P

a

To determine

Lump-sum liquidations: liquidation of partnership in which all assets are converted into cash within a short time, creditors are paid, and a single lump-sum payment is made to the partners for their capital interests. Partnership may experiences losses on disposal of assets, because it has to make offer below the normal selling price to encourage immediate sales. The partnership attempts to collect receivable has to offer large cash discounts for prompt payments. Any goodwill on the partnership books is generally written off when the partnership begins liquidation because it is no longer a going concern.

In some situations a deficit may occur in a partner’s capital account if its credit balance is too low to absorb share of losses, such deficit may be cleared by either partner investing cash or other asset or the partner’s capital deficit is distributed to the other partners in their resulting loss sharing ratio.

Requirement 1

The statement of realization and liquidation for CDG on December 10, 20X6.

Answer 7

Chapter 16, Problem 16.13P

a

To determine

Lump-sum liquidations: liquidation of partnership in which all assets are converted into cash within a short time, creditors are paid, and a single lump-sum payment is made to the partners for their capital interests. Partnership may experiences losses on disposal of assets, because it has to make offer below the normal selling price to encourage immediate sales. The partnership attempts to collect receivable has to offer large cash discounts for prompt payments. Any goodwill on the partnership books is generally written off when the partnership begins liquidation because it is no longer a going concern.

In some situations a deficit may occur in a partner’s capital account if its credit balance is too low to absorb share of losses, such deficit may be cleared by either partner investing cash or other asset or the partner’s capital deficit is distributed to the other partners in their resulting loss sharing ratio.

Requirement 1

The statement of realization and liquidation for CDG on December 10, 20X6.

Answer 8

b

To determine

Lump-sum liquidations: liquidation of partnership in which all assets are converted into cash within a short time, creditors are paid, and a single lump-sum payment is made to the partners for their capital interests. Partnership may experiences losses on disposal of assets, because it has to make offer below the normal selling price to encourage immediate sales. The partnership attempts to collect receivable has to offer large cash discounts for prompt payments. Any goodwill on the partnership books is generally written off when the partnership begins liquidation because it is no longer a going concern.

In some situations a deficit may occur in a partner’s capital account if its credit balance is too low to absorb share of losses, such deficit may be cleared by either partner investing cash or other asset or the partner’s capital deficit is distributed to the other partners in their resulting loss sharing ratio.

Requirement 2

The schedule of the net worth of each partner after liquidation.

Answer 9

b

To determine

Lump-sum liquidations: liquidation of partnership in which all assets are converted into cash within a short time, creditors are paid, and a single lump-sum payment is made to the partners for their capital interests. Partnership may experiences losses on disposal of assets, because it has to make offer below the normal selling price to encourage immediate sales. The partnership attempts to collect receivable has to offer large cash discounts for prompt payments. Any goodwill on the partnership books is generally written off when the partnership begins liquidation because it is no longer a going concern.

In some situations a deficit may occur in a partner’s capital account if its credit balance is too low to absorb share of losses, such deficit may be cleared by either partner investing cash or other asset or the partner’s capital deficit is distributed to the other partners in their resulting loss sharing ratio.

Requirement 2

The schedule of the net worth of each partner after liquidation.

Answer 10

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Answer 13

Ch. 16 - What are the major causes of a dissolution? What...Ch. 16 - Prob. 16.2Q Ch. 16 - Prob. 16.3Q Ch. 16 - Prob. 16.4Q Ch. 16 - Contrast a lump-sum liquidation with an...Ch. 16 - Prob. 16.6Q Ch. 16 - Prob. 16.7Q Ch. 16 - Prob. 16.8Q Ch. 16 - Prob. 16.9Q Ch. 16 - Prob. 16.10Q

Solution Summary: The author describes Lump-sum liquidations, in which all assets are converted into cash, creditors are paid, and a single lump- sum payment is made to the partners for their capital interests.

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