After 25 years of operations, the Orange, Banana, and Pineapple partnership has decided to liquidate. At that time, 1/1/20x2, the partnership balance sheet is as follows: Orange, Banana, and Pineapple, Partners Balance Sheet as of 12/31/20x1 Assets Liabilities and Partners' Capital Cash $80,000 Liabilities $47,000 Noncash assets 205,000 Orange, Capital 138,000 Banana, Capital 119,500 Pineapple, Capital (19,500) Total assets $285,000 Total Liabilities and Capital $285,000 In accordance with the Articles of Partnership, the partners agreed to share profits and losses as follows: Orange, Capital 30% Banana, Capital 40% Pineapple, Capital 30% The partnership estimates liquidation expenses of $10,000. A. Before beginning liquidation activities, the partnership agrees that Pineapple must eliminate her deficit balance. Assuming the noncash assets have zero value, what is the maximum amount Pineapple must contribute to the partnership to eliminate the deficit balance in her capital account? Cash $80,000 Liabilities -$47,000 Liquidation Exp -$10,000 Net Cash $23,000 Loss of 205,000 (non cash) * 30% (pineapples Share)= 64,500 loss. (19,500) - (64,500) pineapple must contribute 84,000 Assuming maximum losses, prepare a formal Statement of Liquidation for the partnership. Based on your schedule of liquidation, how much will be distributed to each partner upon full liquidation? C. Orange believes the partnership will receive at least $80,000 for the noncash assets. Assuming Orange is correct, prepare a schedule showing the amount she will receive if the noncash assets are liquidated for В. $80,000. D. For the Orange, Banana, & Pineapple partnership, compute the total amount of cash available for safe payment before disposal of any noncash assets.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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After 25 years of operations, the Orange, Banana, and Pineapple partnership has decided to liquidate. At that time,
1/1/20x2, the partnership balance sheet is as follows:
Orange, Banana, and Pineapple, Partners
Balance Sheet
as of 12/31/20x1
Assets
Liabilities and Partners' Capital
Cash
$80,000 Liabilities
$47,000
Noncash assets
205,000 Orange, Capital
138,000
Banana, Capital
119,500
Pineapple, Capital
(19,500)
Total assets
$285,000 Total Liabilities and Capital
$285,000
In accordance with the Articles of Partnership, the partners agreed to share profits and losses as follows:
Orange, Capital
30%
Banana, Capital
40%
Pineapple, Capital
30%
The partnership estimates liquidation expenses of $10,000.
A. Before beginning liquidation activities, the partnership agrees that Pineapple must eliminate her deficit
balance. Assuming the noncash assets have zero value, what is the maximum amount Pineapple must
contribute to the partnership to eliminate the deficit balance in her capital account?
Cash
$80,000
Liabilities
-$47,000
Liquidation Exp
-$10,000
Net Cash
$23,000
Loss of 205,000 (non cash) * 30% (pineapples Share)= 64,500 loss. (19,500) - (64,500) pineapple must contribute
84,000
B. Assuming maximum losses, prepare a formal Statement of Liquidation for the partnership. Based on your
schedule of liquidation, how much will be distributed to each partner upon full liquidation?
C. Orange believes the partnership will receive at least $80,000 for the noncash assets. Assuming Orange is
correct, prepare a schedule showing the amount she will receive if the noncash assets are liquidated for
$80,000.
For the Orange, Banana, & Pineapple partnership, compute the total amount of cash available for safe
payment before disposal of any noncash assets.
D.
Transcribed Image Text:After 25 years of operations, the Orange, Banana, and Pineapple partnership has decided to liquidate. At that time, 1/1/20x2, the partnership balance sheet is as follows: Orange, Banana, and Pineapple, Partners Balance Sheet as of 12/31/20x1 Assets Liabilities and Partners' Capital Cash $80,000 Liabilities $47,000 Noncash assets 205,000 Orange, Capital 138,000 Banana, Capital 119,500 Pineapple, Capital (19,500) Total assets $285,000 Total Liabilities and Capital $285,000 In accordance with the Articles of Partnership, the partners agreed to share profits and losses as follows: Orange, Capital 30% Banana, Capital 40% Pineapple, Capital 30% The partnership estimates liquidation expenses of $10,000. A. Before beginning liquidation activities, the partnership agrees that Pineapple must eliminate her deficit balance. Assuming the noncash assets have zero value, what is the maximum amount Pineapple must contribute to the partnership to eliminate the deficit balance in her capital account? Cash $80,000 Liabilities -$47,000 Liquidation Exp -$10,000 Net Cash $23,000 Loss of 205,000 (non cash) * 30% (pineapples Share)= 64,500 loss. (19,500) - (64,500) pineapple must contribute 84,000 B. Assuming maximum losses, prepare a formal Statement of Liquidation for the partnership. Based on your schedule of liquidation, how much will be distributed to each partner upon full liquidation? C. Orange believes the partnership will receive at least $80,000 for the noncash assets. Assuming Orange is correct, prepare a schedule showing the amount she will receive if the noncash assets are liquidated for $80,000. For the Orange, Banana, & Pineapple partnership, compute the total amount of cash available for safe payment before disposal of any noncash assets. D.
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