The partnership of Able, Bower, and Cramer was liquidated. The partners have shared profits and losses in the ratio of 2:4:4. Prior to liquidation, their capital balances were the following*: Able Bower Cramer $10,000 $(5,000) $(15,000) * Deficit shown in
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The
|
Able |
Bower |
Cramer |
|
$10,000 |
$(5,000) |
$(15,000) |
* Deficit shown in parentheses
Cash totaled $20,000, with liabilities amounting to $30,000. A review of the individual partners' personal financial status reveals the following:
|
|
Assets |
Liabilities |
|
Able |
$ 5,000 |
$20,000 |
|
Bower |
6,000 |
4,000 |
|
Cramer |
30,000 |
20,000 |
Prepare a worksheet to liquidate the partnership.
Step by step
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- The partnership of Able, Bower, and Cramer was liquidated. The partners have shared profits and losses in the ratio of 2:4:4. Prior to liquidation, their capital balances were the following*: Able Bower Cramer $10,000 $(5,000) $(15,000) * Deficit shown in parentheses Cash totaled $20,000, with liabilities amounting to $30,000. A review of the individual partners' personal financial status reveals the following: Assets Liabilities Able $ 5,000 $20,000 Bower 6,000 4,000 Cramer 30,000 20,000 Required: Prepare a worksheet to liquidate the partnership.The balance sheet for the Delphine, Xavier, and Olivier partnership follows: Delphine, Xavier, and Olivier share profits and losses in the ratio of 4:4:2, respectively. The partners have agreed to terminate the business and estimate that $12,000 in liquidation expenses will be incurred. What is the amount of cash that safely can be paid to partners prior to liquidation of noncash assets? How should the safe amount of cash determined in (a) be distributed to the partners?The partnership of Larson, Norris, Spencer, and Harrison has decided to terminate operations and liquidate all business property. During this process, the partners expect to incur $8,000 in liquidation expenses. All partners are currently solvent. The balance sheet reported by this partnership at the time that the liquidation commenced follows. The percentages indicate the allocation of profits and losses to each of the four partners. Cash Accounts receivable Inventory Land and buildings Equipment Total assets $28,250 Liabilities 44,000 Larson, capital (20%) 39,000 Norris, capital (30%) 23,000 Spencer, capital (20%) 104,000 Harrison, capital (30%) $238,250 Total liabilities and capital $ 47,000 15,000 60,000 75,000 41,250 $238,250
- Nettles, King, and Tanaka are partners sharing income 3:2:1. After the firm's loss from liquidation is distributed, the capital account balances were as follows: Nettles, $24,000 Dr.; King, $92,000 Cr.; and Tanaka, $60,000 Cr. If Nettles is personally bankrupt and unable to pay any of the $24,000, what will be the amount of cash received by King and Tanaka upon liquidation?Nettles, King, and Tanaka are partners sharing income 3:2:1. After the firm’s loss from liquidation is distributed, the capital account balances were as follows: Nettles, $15,000 Dr.; King, $46,000 Cr.; and Tanaka, $71,000 Cr. If Nettles is personally bankrupt and unable to pay any of the $15,000, what will be the amount of cash received by King and Tanaka upon liquidation? If an amount is zero, enter in 0. Use the minus sign to indicate any deficiencies. Amount of Cash Received Nettles King Tanaka Capital balances after realization $ $ $ Distribution of partner deficiency Capital balances after deficiency distribution $ $ $Christian and Dior are partners, who share profits equally, were incapacitated due to a car accident. A liquidator was appointed to wind up their partnership. The balance sheet accounts are shown below: Cash P 35,000 P 19,000 Other Assets 110,000 Liabilities Christian Capital- Dior Capital 72,000 54,000 The liquidator anticipates that considerable time would be required to dispose all the assets. Liquidation expenses are estimated to be P 10,000. 25. At this time, the amounts of cash to be distributed safely to each partner are: a. Christian, P 5,000; Dior, P 1,000. b. Christian, P 6,000; Dior, P 0. C. Christian, P 15,000; Dior, PO. d. Christian, P 15,000; Dior, P 1,000.
- The partnership of Larson, Norris, Spencer, and Harrison has decided to terminate operations and liquidate all business property. During this process, the partners expect to incur $8,000 in liquidation expenses. All partners are currently solvent.The balance sheet reported by this partnership at the time that the liquidation commenced follows. The percentages indicate the allocation of profits and losses to each of the four partners. Cash . . . . . . . . . . . . . . . . . . . $ 28,250 Liabilities . . . . . . . . . . . . . . . $ 47,000Accounts receivable . . . . . 44,000 Larson, capital (20%) . . . . . . . 15,000Inventory . . . . . . . . . . . . . . . 39,000 Norris, capital (30%) . . . . . . 60,000Land and buildings . . . . . . 23,000 Spencer, capital (20%) . . . 75,000Equipment . . . . . . . . . . . . . . 104,000 Harrison, capital (30%) . . . . 41,250 Based on the information provided, prepare a predistribution plan for liquidating this partnership.As of December 31, 2012, the books of Vicky, Garci and Cabe Partnership showed capital balances of Vicky P40,000, Garci P25,000 and Cabe P5,000. The partners’ profit and loss ratio was 3:2:1 respectively. The partners decided to dissolve and liquidate. They sold all the non-cash assets for P37,000 cash. After settlement of all liabilities amounting to P12,000, they still have P28,000 cash left for distribution. The loss on realization of the non cash assets was?The Henry, Isaac, and Jacobs partnership was about to enter liquidation with the following account balances:cash 90000 liabilities 60000 Noncash assets 300000 Henry capital 80000 Isaac capital 110000 Jacobs capital 140000 Total 390000 Total 390000Estimated expenses of liquidation were $5,000. Henry, Isaac, and Jacobs shared profits and losses in a ratio of 2:4:4. Before Liquidating any assets, the partners determined the amount of cash for safe payments and distributed it. The noncash asets were then sold for $120,000 and the liquidation expenses of $5,000 were paid. How much of the $120,000 would be distributed to the partners? (Hint Either a predistribution plan or a schedule of safe payments would be appropriate for solving this item.)
- K, L, and M are partners of KLM Partnership. They decided to liquidate on March 31, of the current year. On this date, they have non-cash assets of 530,000 and liabilities of 250,000, including loan from M of 50,000. K, L, and M have capital balances of 80,000, 130,000, and 90,000, respectively. Profits and losses are 3:3:4 for K, L, and M. All partners are solvent. Determine the total loss on realization if M received 25,000 in the final settlement.A partnership has gone through liquidation and now reports the following account balances: Cash Loan from Jones Wayman, capital Jones, capital Fuller, capital Rogers, capital $16,000 3,000 (2,000) (deficit) (5,000) (deficit) 13,000 7,000 Profits and losses are allocated on the following basis: Wayman, 30 percent; Jones, 20 percent; Fuller, 30 percent; and Rogers, 20 percent. Which of the following events should occur now? a. Jones should receive $3,000 cash because of the loan balance. b. Fuller should receive $11,800 and Rogers $4,200. c. Fuller should receive $10,600 and Rogers $5,400. d. Jones should receive $3,000, Fuller $8,800, and Rogers $4,200Partners Grace, Paul, and Trisha share profits and losses equally. On December 31, Grace, Paul, and Trisha had capital balances of P30,000, P50,000, and P20,000, respectively. On the same date, they decided to dissolve and liquidate. Non-cash assets amounting to P18,000 were sold for P12,000. The loss on realization of non-cash assets and share of Grace on the said loss amounted to