Advanced Financial Accounting
12th Edition
ISBN: 9781259916977
Author: Christensen, Theodore E., COTTRELL, David M., Budd, Cassy
Publisher: Mcgraw-hill Education,
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Chapter 16, Problem 16.2.1E
To determine
Installment liquidation:It typically requires several months to complete liquidation, it includes installment, payments to partners during liquidation period because they require funds for the personal purposes. Most liquidations take place over an extended period in order to obtain the large possible amount from the realization of the assets.Some
Installment liquidations involve distributing cash to partners before complete liquidation of assets occurs. To ensure fairness in making cash distributions a schedule of safe payments to partners and the cash distribution plan is followed.
To choose:correct answer and show how much cash is distributed to each partner when cash realized is $120,000.
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The CDG Carlos, Dan, and Gall Partnership has decided to liquidate as of December 1, 20X6. A balance sheet on the date follows:
Assets
Cash
Accounts Receivable (net)
Inventories
Property, Plant and Equipment (net)
Total Assets
Liabilities and Capital
Liabilities:
Accounts Payable
Capital:
CDG PARTNERSHIP
Balance Sheet
At December 1, 20x6
Carlos, Capital
Dan, Capital
Gail, Capital
Total Capital
Total Liabilities and Capital
$138,000
68,000
78,000
Personal assets
Personal liabilities
Personal net worth
$ 34,000
93,000
118,000
336,000
$581,000
$297,000
284,000
$581,000
Additional Information
1. Each partner's personal assets (excluding partnership capital interests) and personal liabilities as of December 1, 20X6, follow:
Carlos
Dan
Gail
$ 268,000 $310,000 $368,000
(239,000) (231,000) (340,000)
$ 87,000 $ 28,000
$ 29,000
2. Carlos, Dan, and Gall share profits and losses in the ratio 15:45:40,
3. CDG sold all noncash assets on December 10, 20X6, for $276,000.
Required information
[The following information applies to the questions displayed below.]
Turner, Roth, and Lowe are partners who share income and loss in a 2:3:5 ratio (in percents: Turner, 20%; Roth, 30%; and
Lowe, 50% ). The partners decide to liquidate the partnership. Immediately before liquidation, the partnership balance
sheet shows total assets, $164,400; total liabilities, $110,000; Turner, Capital, $5,700; Roth, Capital, $15,600; and Lowe,
Capital, $33,100. The liquidation resulted in a loss of $98,400.
Required:
a. Allocate the loss to the partners.
b. Determine how much each partner should contribute to the partnership to cover any remaining capital deficiency.
Complete this question by entering your answers in the tabs below.
Required A Required B
Allocate the loss to the partners.
Note: Losses and deficits should be indicated with a minus sign.
Initial capital balances
Allocation of gains (losses)
Capital balances after gains (losses)
2/10
Turner
$
5,700
3/10
33,100 $…
The MFP Partnership is to be liquidated when the ledger shows the following:
Cash
$50,000
Noncash Assets
200,000
Liabilities
50,000
Mossimo, Capital
75,000
Fandango, Capital
100,000
Plank, Capital
25,000
Mossimo, Fandango, and Plank’s income ratios are 6:3:1, respectively.Prepare separate entries to record the liquidation of the partnership assuming that the noncash assets are sold for $140,000 in cash.
Chapter 16 Solutions
Advanced Financial Accounting
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
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