FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- In accounting for the lump-sum liquidation of a partnership, cash payments to partners after all non-partner creditors' claims have been satisfied, but before the final cash distribution should be according toa. the final balances in partner capital accounts.b. the partners' relative share of the gain or loss on liquidation.c. the partners' relative profit and loss sharing ratio.d. safe payment computations.arrow_forwardComplete this question by entering your answers in the tabs below. Required A Required B For how much money must the other assets be sold so that each partner receives some amount of cash in a liquidation? Other assets must be soldarrow_forwardRequire parts a, b, & carrow_forward
- Topic: 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_forwardAnswer if TRUE or FALSE. If the statement is FALSE provide at least a brief explanation why it's wrong. 1. Liquidation expenses which are incurred in the realization of non-cash assets affect cash but not partners' capital. 2. A partnership is generally liquidated when its term is terminated. 3. The outside creditors of the partnership have better claims over the personal assets of the partner. 4. Gains and losses arising from the sale of the assets in a partnership liquidation are always divided equally among partners.arrow_forwardWhat information do the capital accounts found in partnership accounting convey?arrow_forward
- The balance sheet for the Delphine, Xavier, and Olivier partnership follows: Cash Noncash assets Total assets $ 75,120 142,000 $ 217,120 Required A Liabilities Delphine, capital Xavier, capital Olivier, capital Total liabilities and capital 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 $16,200 in liquidation expenses will be incurred. Complete this question by entering your answers in the tabs below. Required B a. What is the amount of cash that safely can be paid to partners prior to liquidation of noncash assets? b. Calculate the amount of safe payment that can be made to each partner prior to liquidation of noncash assets. 50, 500 80,580 61,000 25,040 $ 217,120 $arrow_forwardFor a partnership, which of the following account is not a current asset? Group of answer choices Cash Merchandise Inventory Accounts Receivable Accounts Payablearrow_forwardWhen accounts receivables are transferred into a partnership, at what amount should they be recorded? Include a definition of Accounts Receivable in your response.arrow_forward
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