Agarwal, Bergeron, and Cishek have been in partnership for a number of years. The partners allocate all profits and losses on a 4:2: basis, respectively. Recently, each partner has become personally insolvent and, thus, the partners have decided to liquidate the business in hopes of remedying their personal financial problems. As of September 1, the partnership's balance sheet is as follows: Cash Accounts receivable Inventory Land, building, and equipment (net) $ 29,000 120,000 110,000 68,000 Liabilities Agarwal, capital $ 108,000 62,000 Bergeron, capital 93,000 Cishek, capital 64,000 Total assets $ 327,000 Total liabilities and capital $ 327,000 Required: Prepare journal entries for the following transactions: Note: Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" i the first account field. a. Sold all inventory for $74,000 cash. b. Paid $12,900 in liquidation expenses. c. Paid $58,000 of the partnership's liabilities. d. Collected $69,000 of the accounts receivable. e. Distributed safe payments of cash; the partners anticipate no further liquidation expenses. f. Sold remaining accounts receivable for 20 percent of face value. g. Sold land, building, and equipment for $35,000. h. Paid all remaining liabilities of the partnership. i. Distributed cash held by the business to the partners. Answer is complete but not entirely correct. No Transaction 1 Cash Agarwal, Capital Bergeron, Capital Cishek, Capital General Journal Debit Credit 74,000 18,000 9,000 9,000 110,000 Inventory 2 b. Agarwal, Capital 6,450 Bergeron, Capital 3,225 Cishek, Capital 3,225 Cash 12,900 3 C. Liabilities Cash 58,000 58,000 4 d. Cash 69,000 Accounts receivable 69,000 5 e. Bergeron, Capital Cishek, Capital Cash 8,425 8,425 16,850 6 f. Cash 10,200 Agarwal, Capital 20,400 Bergeron, Capital 10,200 Cishek, Capital 10,200 Accounts receivable 51,000 7 9- Cash 35,000 Agarwal, Capital 16,500 Bergeron, Capital 8,250 Cishek, Capital 8,250 Land, building and equipment 68,000 8 h. Liabilities Cash 9 i. Agarwal, Capital Bergeron, Capital Cishek, Capital Cash 50,000 50,000 39,425 19,713 19,713 78,850

Agarwal, Bergeron, and Cishek have been in partnership for a number of years. The partners allocate all profits and losses on a 4:2: basis, respectively. Recently, each partner has become personally insolvent and, thus, the partners have decided to liquidate the business in hopes of remedying their personal financial problems. As of September 1, the partnership's balance sheet is as follows: Cash Accounts receivable Inventory Land, building, and equipment (net) $ 29,000 120,000 110,000 68,000 Liabilities Agarwal, capital $ 108,000 62,000 Bergeron, capital 93,000 Cishek, capital 64,000 Total assets $ 327,000 Total liabilities and capital $ 327,000 Required: Prepare journal entries for the following transactions: Note: Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" i the first account field. a. Sold all inventory for $74,000 cash. b. Paid $12,900 in liquidation expenses. c. Paid $58,000 of the partnership's liabilities. d. Collected $69,000 of the accounts receivable. e. Distributed safe payments of cash; the partners anticipate no further liquidation expenses. f. Sold remaining accounts receivable for 20 percent of face value. g. Sold land, building, and equipment for $35,000. h. Paid all remaining liabilities of the partnership. i. Distributed cash held by the business to the partners. Answer is complete but not entirely correct. No Transaction 1 Cash Agarwal, Capital Bergeron, Capital Cishek, Capital General Journal Debit Credit 74,000 18,000 9,000 9,000 110,000 Inventory 2 b. Agarwal, Capital 6,450 Bergeron, Capital 3,225 Cishek, Capital 3,225 Cash 12,900 3 C. Liabilities Cash 58,000 58,000 4 d. Cash 69,000 Accounts receivable 69,000 5 e. Bergeron, Capital Cishek, Capital Cash 8,425 8,425 16,850 6 f. Cash 10,200 Agarwal, Capital 20,400 Bergeron, Capital 10,200 Cishek, Capital 10,200 Accounts receivable 51,000 7 9- Cash 35,000 Agarwal, Capital 16,500 Bergeron, Capital 8,250 Cishek, Capital 8,250 Land, building and equipment 68,000 8 h. Liabilities Cash 9 i. Agarwal, Capital Bergeron, Capital Cishek, Capital Cash 50,000 50,000 39,425 19,713 19,713 78,850

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter12: Accounting For Partnerships And Limited Liability Companies

Section: Chapter Questions

Problem 4PB

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