ADVANCED FINANCIAL ACCOUNTING-ACCESS
ADVANCED FINANCIAL ACCOUNTING-ACCESS
12th Edition
ISBN: 9781260518740
Author: Christensen
Publisher: MCG
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Chapter 16, Problem 16.1.5E
To determine

Liquidation of partnership: Winding-up and liquidation of the partnership begin after its dissolution. The winding-up process includes the transactions necessary to liquidate the partnership, such as collection of receivables disposal of noncash assets, payment of partnership’s obligations and distribution of any remaining net balance to the partners, in cash according to their capital interests. If partnership agreement does not have any provisions on liquidation or any liquidation ratio or profits or loss ratio for distribution of remaining balance, it is distributed using normal profit and loss ratio during partnership’s operation.

To choose:The correct answer to determine how the available cash is distributed after paying accounts payable.

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SHOW YOUR SOLUTION IN GOOD ACCOUNTING FORM: The ETO Partnership is in the process of liquidation. The account balances prior to liquidation are given below:  The partners share profits in the following ratio: Aurora, 1/6; Esteban, 2/6; and Tyro, 3/6. Upon liquidation of the partnership, Aurora should have received:
Kendra, Cogley, and Mei share income and loss in a 3:2:1 ratio (in ratio form: Kendra, 3⁄6; Cogley, 2⁄6; and Mei, 1⁄6). The partners have decided to liquidate their partnership. On the day of liquidation, their balance sheet appears as follows. Required Prepare journal entries for (a) the sale of inventory, (b) the allocation of its gain or loss, (c) the payment of liabilities at book value, and (d) the distribution of cash in each of the following separate cases: Inventory is sold for (1) $600,000; (2) $500,000; (3) $320,000 and partners with deficits pay their deficits in cash; and (4) $250,000 and partners with deficits do not pay their deficits. (Round to the nearest dollar.)
What amount must the remaining assets be sold in order for Julia to receive P197,500 after liquidation? (Good Accounting Form)

Chapter 16 Solutions

ADVANCED FINANCIAL ACCOUNTING-ACCESS

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