Liquidation of
To choose:the correct answer to determine amount distributed to each partner on liquidation when partnership is liquidated in instalments as cash become available, if inventory costing $200,000 is sold for $140,000.
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Advanced Financial Accounting
- A. Cara. Fatima and Zabra are sharing income and loss in a 1.2.2 ratio respectively and decided to d their partnership Prine to the final distribution of cash to the partners, Sarah (60,000), Fatima has capital balance of $94, 000, and Zahra has capital balance of $106,000. the cash balance is $200,000. Required: Prepare journal entries to record the above liquidation process When: Sara is able to pay the amount she owes to the partnership. B. Batool plans to withdraw from "BRF Partnership". The recorded balance of Batool's capital account is $60,000. The remaining partners, Reem and Afrah, agreed to pay Batool cash of $58,000. The partners share income and loss equally. Required Prepare the journal entry to record the above withdrawal transaction.arrow_forwardWhat will i do for the liquidation expense stated in the problem related to parnership liquidation installment - cash priority program? Problem: On January 1, 2022, partners Kho, Lagman and Magno decided to liquidate their partnership. Prior to the liquidation, the partnersip had cash of P12,000, non-cash assets of P146,000, liabilities to outsiders of P36,000 and a note payable to Partner Magno of P14,000. The capital balances of the partners were: Kho - P36,000; Lagman-P54,000; Magno-P18,000. The partners share profits and losses in the ratio of 3:3:4,respectively.During January 2022, the partnership received cash of P30,000 from the sale of assets with a book value of P38,000 and paid P3,600 of liquidation expenses. During February, the partnership realized P44,000-from the sale of assets with a book value of P35,000 and paid liquidation expenses of P8,400. During March, the remaining assets were sold for P36,000. The partners agreed to distribute cash at the end of each…arrow_forwardThe financial position of the partnership Marie, Shey, Allan and Roi, just prior to liquidation shows: Marie, Loan 25,000 Marie, Capital 137,500 Shey, capital 128,750 Allan, capital 171,250 Roi, Capital 112,500 The partners share profits and losses on a 4:3:2:1 ratio, respectively. Certain assets are sold for P150,000 and is distributed to partners. How much cash should Allan receive? Group of answer choices 67,917 0 82,083 150,000arrow_forward
- The following condensed balance sheet is for the partnership of Hardwick, Saunders, and Ferris, who share profits and losses in the ratio of 4:3:3, respectively: The partners decide to liquidate the partnership. Forty percent of the other assets are sold for $200,000. Prepare a proposed schedule of liquidation at this point in time.arrow_forwardWrite a Sample Format of Statement of Liquidation (Lump Sump) Other Instruction (Assumptions) 1. Values should be written as XXX if positive and (XXX) if negative 2. 7 Partners [JJ, Simon, Harry, Vik, Josh, Ethan and Tobi] 3. There is a gain in the realization of assets 4. There is liquidation expense. 5. Simon has receivables from partnership. 6. Ethan and Tobi have payables to the partnership (Non-anonymous question) *arrow_forwardOn June 30, 2021 – Gold, Titanium and Silver have decided to liquidate their partnership. The shared profits of the partners are in the ratio of 2:2:1, respectively. The partnership's post-closing trial balance is given in the picture. Required: 1.Prepare the liquidation journal entries. 2. Prepare the statement of liquidation.arrow_forward
- 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_forwardFollowing is a series of independent cases. In each situation, indicate the cash distribution to be made to partners at the end of the liquidation process. Unless otherwise stated, assume that all solvent partners will reimburse the partnership for their deficit capital balances.Part AThe Buarque, Monte, and Vinicius partnership reports the following accounts. Vinicius is personally insolvent and can contribute only an additional $9,000 to the partnership. Cash . . . . . . . . . . . . . . . . .. . $ 130,000Liabilities . . . . . . . . . . . . . .. . . 35,000Monte, loan . . . . . . . . . . . . . . . 20,000Buarque, capital (50% of profits and losses) . . . . . . . . . . . . . . 50,000Monte, capital (25%) . . . . . 40,000Vinicius, capital (25%) . . . . . . . . . . . . . . . . . . . . . . . . . (15,000) (deficit) Part BDrawdy, Langston, and Pearl operate a local accounting firm as a partnership. After working together for several years, they have decided to liquidate the partnership’s…arrow_forwardA partnership has gone through liquidation and now reports the following account balances: 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? Jones should receive $3,000 cash because of the loan balance. Fuller should receive $11,800 and Rogers $4,200. Fuller should receive $10,600 and Rogers $5,400. Jones should receive $3,000, Fuller $8,800, and Rogers $4,200.arrow_forward
- The financial position of the partnership Marie, Shey, Allan and Roi, just prior to liquidation shows: Marie, Loan 25,000 Marie, Capital 137,500 Shey, capital 128,750 Allan, capital 171,250 Roi, Capital 112,500 The partners share profits and losses on a 4:3:2:1 ratio, respectively. Certain assets are sold for P150,000 and is distributed to partners. How much cash should Allan receive?arrow_forwardOn December 1, 2021 – Apple, Banana, and Lemon decided to finally liquidate their partnership. (Statement of financial position/Balance sheet is given in the picture) Required: 1. Prepare the liquidation journal entries. 2. Prepare the statement of liquidation.arrow_forwardA partnership is considering possible liquidation because one of the partners (Bell) is personally insolvent. Profits and losses are divided on a 4:3:2:1 basis, respectively. Capital balances at the current time are Bell’s creditors have filed a $21,000 claim against the partnership’s assets. The partnership currently holds assets of $300,000 and liabilities of $100,000. If the assets can be sold for $190,000, what is the minimum amount that Bell’s creditors would receive? –0– $2,000 $2,800 $6,000arrow_forward