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A 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, capital Hardy, capital Dennard, capital Suddath, capital $ 70,000 64,000 12,000 88,000 Bell's creditors have filed a $29,000 claim against the partnership's assets. The partnership currently holds assets of $380,000 and liabilities of $146,000. An independent appraiser indicates that the assets can be sold for $230,000. Required: Prepare a statement of partnership liquidation to determine the amount of cash that Bell would receive from the sale of partnership assets. Note: Amounts to be deducted should be entered with a minus sign.

A 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, capital Hardy, capital Dennard, capital Suddath, capital $ 70,000 64,000 12,000 88,000 Bell's creditors have filed a $29,000 claim against the partnership's assets. The partnership currently holds assets of $380,000 and liabilities of $146,000. An independent appraiser indicates that the assets can be sold for $230,000. Required: Prepare a statement of partnership liquidation to determine the amount of cash that Bell would receive from the sale of partnership assets. Note: Amounts to be deducted should be entered with a minus sign.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A 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, capital Hardy, capital Dennard, capital Suddath, capital Bell's creditors have filed a $29,000 claim against the partnership's assets. The partnership currently holds assets of $380,000 and liabilities of $146,000. An independent appraiser indicates that the assets can be sold for $230,000. Required: Prepare a statement of partnership liquidation to determine the amount of cash that Bell would receive from the sale of partnership assets. Note: Amounts to be deducted should be entered with a minus sign. Balances Sale of assets Subtotal Pay liabilities Subtotal Allocate deficit Subtotal Distribute cash Ending balances $ $ $ 70,000 64,000 12,000 88,000 $ $ $ $ Cash BELL, HARDY, DENNARD, AND SUDDATH PARTNERSHIP Statement of Partnership Liquidation (Hypothetical) 0 0 0 $ 0 $ 0 $ 0 $ Assets Liabilities 0 0 0 0 0 $ 0 0 $ $ 0 0 146,000 146,000 $ 0 Bell, Capital Hardy, Capital 40% 30% 64,000 146,000 $ 0 146,000 $ $ 0 0 0 $ 0 $ 0 $ Dennard, Capital 20% $ 12,000 $ 64,000 0 64,000 $ 64,000 $ Suddath, Capital 10% 64,000 $ 12,000 0 12,000 $ 12,000 $ 0 12,000 $ 88,000 88,000 0 88,000 88,000 88,000
Transcribed Image Text:A 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, capital Hardy, capital Dennard, capital Suddath, capital Bell's creditors have filed a $29,000 claim against the partnership's assets. The partnership currently holds assets of $380,000 and liabilities of $146,000. An independent appraiser indicates that the assets can be sold for $230,000. Required: Prepare a statement of partnership liquidation to determine the amount of cash that Bell would receive from the sale of partnership assets. Note: Amounts to be deducted should be entered with a minus sign. Balances Sale of assets Subtotal Pay liabilities Subtotal Allocate deficit Subtotal Distribute cash Ending balances $ $ $ 70,000 64,000 12,000 88,000 $ $ $ $ Cash BELL, HARDY, DENNARD, AND SUDDATH PARTNERSHIP Statement of Partnership Liquidation (Hypothetical) 0 0 0 $ 0 $ 0 $ 0 $ Assets Liabilities 0 0 0 0 0 $ 0 0 $ $ 0 0 146,000 146,000 $ 0 Bell, Capital Hardy, Capital 40% 30% 64,000 146,000 $ 0 146,000 $ $ 0 0 0 $ 0 $ 0 $ Dennard, Capital 20% $ 12,000 $ 64,000 0 64,000 $ 64,000 $ Suddath, Capital 10% 64,000 $ 12,000 0 12,000 $ 12,000 $ 0 12,000 $ 88,000 88,000 0 88,000 88,000 88,000
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