ADVANCED FIN. ACCT. LL W/ACCESS>CUSTOM<
12th Edition
ISBN: 9781265074623
Author: Christensen
Publisher: MCG CUSTOM
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 16, Problem 16.1C
Cash Distributions to Partners
Analysis
The partnership of Bull and Bear is in the process of termination. The partners have disagreed on virtually every decision and have decided to liquidate the present business with each partner taking his own clients from the partnership. Bull wants cash distributed as it becomes available; Bear wants no cash distributed until all assets have been sold and all liabilities settled. You are called in to aid in the termination and liquidation press.
Required
How would you respond to each of the partners’ request?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
no need to explain. What is a cash priority program?
a. A guideline for the cash distributions made to partners during a liquidation
b. A list of the rules to be performed during a partnership dissolution
c. A list of the transactions that will transpire in the reorganization of a partnership
d. None of the above
Question
Bobby Donal and Bill Spader are discussing the liquidation of a partnership. Bobby maintains that all cash should be distributed to partners on the basis of their income ratios. Is he correct? Explain.
Accounting
In the liquidation of a partnership, a loan from a
partner
a. Will be paid off at the same time as payment
of other liabilities of the partnership
b. Will be paid off before distribution of cash to
partners for their capital investments
c. Will be closed to the partner's drawing
account
d. Will be written off
Chapter 16 Solutions
ADVANCED FIN. ACCT. LL W/ACCESS>CUSTOM<
Ch. 16 - What are the major causes of a dissolution? What...Ch. 16 - Prob. 16.2QCh. 16 - Prob. 16.3QCh. 16 - Prob. 16.4QCh. 16 - Contrast a lump-sum liquidation with an...Ch. 16 - Prob. 16.6QCh. 16 - Prob. 16.7QCh. 16 - Prob. 16.8QCh. 16 - Prob. 16.9QCh. 16 - Prob. 16.10Q
Ch. 16 - Prob. 16.11QCh. 16 - The installment liquidation process uses a...Ch. 16 - Prob. 16.13QCh. 16 - Prob. 16.14QCh. 16 - Prob. 16.15QCh. 16 - Cash Distributions to Partners Analysis The...Ch. 16 - Prob. 16.2CCh. 16 - Prob. 16.3CCh. 16 - Sharing Losses during Liquidation Research Hiller,...Ch. 16 - Prob. 16.1.1ECh. 16 - Prob. 16.1.2ECh. 16 - Prob. 16.1.3ECh. 16 - Prob. 16.1.4ECh. 16 - Prob. 16.1.5ECh. 16 - Prob. 16.1.6ECh. 16 - Prob. 16.1.7ECh. 16 - Prob. 16.2.1ECh. 16 - Prob. 16.2.2ECh. 16 - Prob. 16.2.3ECh. 16 - Prob. 16.2.4ECh. 16 - Prob. 16.2.5ECh. 16 - Prob. 16.2.6ECh. 16 - Prob. 16.3ECh. 16 - Prob. 16.4ECh. 16 - Prob. 16.5ECh. 16 - Prob. 16.6ECh. 16 - Prob. 16.7ECh. 16 - Prob. 16.8ECh. 16 - Confirmation of Cash Distribution Plan Refer to...Ch. 16 - Prob. 16.10ECh. 16 - Prob. 16.11.1AECh. 16 - Prob. 16.11.2AECh. 16 - Prob. 16.11.3AECh. 16 - Prob. 16.11.4AECh. 16 - Prob. 16.11.5AECh. 16 - Prob. 16.11.6AECh. 16 - Prob. 16.11.7AECh. 16 - Prob. 16.11.8AECh. 16 - Prob. 16.11.9AECh. 16 - Prob. 16.11.10AECh. 16 - Prob. 16.11.11AECh. 16 - Prob. 16.12AECh. 16 - Prob. 16.13PCh. 16 - Prob. 16.14PCh. 16 - Prob. 16.15PCh. 16 - Prob. 16.16PCh. 16 - Prob. 16.17PCh. 16 - Prob. 16.18PCh. 16 - Matching Terms Match the items in the left-hand...Ch. 16 - Prob. 16.20P
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- The following balance sheet is for a local partnership in which the partners have become very unhappy with each other. To avoid more conflict, the partners have decided to cease operations and sell all assets. Using this information, answer the following questions. Each question should be viewed as an situation related to the partnership’s liquidation. The $10,000 cash that exceeds the partnership liabilities is to be disbursed immediately. If profits and losses are allocated to Adams, Baker, Carvil, and Dobbs on a 2:3:3:2 basis, respectively, how will the $10,000 be divided? The $10,000 cash that exceeds the partnership liabilities is to be disbursed immediately. If profits and losses are allocated on a 2:2:3:3 basis, respectively, how will the $10,000 be divided? The building is immediately sold for $70,000 to give total cash of $110,000. The liabilities are then paid, leaving a cash balance of $80,000. This cash is to be distributed to the partners. How much of this money will each…arrow_forwardWhich of the following statements is correct? Options: Each partner has the authority to enter into contracts which are binding upon the partnership A majority consent of all the partners is necessary when admitting a new partner The final distribution of cash to the partners in liquidation shall be made based on their profit and loss sharing agreement Admission of a new partner by purchase will change total assets and total capitalarrow_forwardDon't give answer in image formatarrow_forward
- TRUE OR FALSEarrow_forwardTopic: Partnership liquidation After the distribution of cash to partners in a partnership liquidation, the business would have zero assets, liabilities, and owners' equity. True or false? Why?arrow_forwardChapter- Partnership 1. Explain what the problem is with being a general partner in a partnership. 2. In the last entry for a Statement of Liquidation cash is distributed to the partners. How is this done and why? 3. Henry wanted to purchase an interest in a partnership from Bertha. He paid $11,000 to her for the complete interest. The partnership capital account of Bertha showed only $4,000. Record the entry required.arrow_forward
- In the realization process for a partnership if an asset is sold for more than book value that is recorded in the accounting records, select the statement that correctly describes this transaction. O There is no journal entry required on the partnership's accounting records O There is a loss on realization O There is a gain on realization O none of the above answers What is the process called where a partnership sells the assets, pays the creditors, and distributes the remaining cash or other assets to the partners? O rearranging O liquidation O refinancing O none of the above answersarrow_forwardpayments to partners are made when cash becomes available. C. a partner withdraws from the business and the enterprise continues to function. d. full payment is made to all outside creditors before remaining cash is distributed to part- ners in a final lump sum payment. 40. Partner Jones, Kerr, and Lyons have decided to liquidate their partnership The partnership's statement of financial position reveals the following: Cash Other assets Liabilities 60,000 50,000 500,000 Jones, capital Kerr, capital Lyons, capital 180,000 240,000 70,000 550,000 550,000 ====== ====== The partners share profits and losses in a 4:4:2 ratio and all partners are personally solvent. Lyons received P98,000 in cash in full settlement for her share of the partnership. The selling price for the other asset is: a. P690,000 b. P640,000 C. P360,000 d. P410,000 Silverio, Domingo, Reyes, and Pastor are partners sharing earnings in the ratio of 3:4:6:8 respectively. The balances of their capital accounts on December…arrow_forwardWhen a new partner buys an existing partner's share, how is the partnership cash account affected? Question 4 options: There is no cash entry for the partnership. It is debited. It is credited.arrow_forward
- Kindly answer the problem below.arrow_forwardIn which order are partnership assets distributed to the partners? O Capital balances, loans, profits O Loans, profits, capital balances O Profits, capital balances, loans Loans, capital balances, profitsarrow_forward1. cash payments to partners of a partnership in liquidation are delayed until all noncash assets have been realized, any cash remaining after all partnership creditors have been paid is distributed a. In the ratio for sharing net income and losses b. According to the liquidator’s best judgment c. In amounts equal to the partners’ loan and capital account balances d. In some other manner 2. A joint arrangement in which the assets and liabilities relating to the arrangement are held in a separate vehicle can be: a. Neither joint venture nor joint operation b. Joint operation c. Joint venture d. Either joint venture or joint operationarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
What is liquidity?; Author: The Finance Storyteller;https://www.youtube.com/watch?v=XtjS7CfUSsA;License: Standard Youtube License