he partnership of Wingler, Norris, Rodgers, and Guthrie was formed several years ago as a local architectural firm. Several partners have recently undergone personal financial problems and have decided to terminate operations and liquidate the business. The following balance sheet is drawn up as a guideline for this process: Cash $ 15,000 Liabilities $ 74,000 Accounts receivable 82,000 Rodgers, loan 35,000 Inventory 101,000 Wingler, capital (30%) 120,000 Land 85,000 Norris, capital (10%) 88,000 Building and equipment (net) 168,000 Rodgers, capital (20%) 74,000 Guthrie, capital (40%) 60,000 Total assets $ 451,000 Total liabilities and capital $ 451,000 When the liquidation commenced, liquidation expenses of $16,000 were anticipated as being necessary to dispose of all property. Prepare a predistribution plan for this partnership
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
Part A
The
| Cash | $ | 15,000 | Liabilities | $ | 74,000 |
| 82,000 | Rodgers, loan | 35,000 | |||
| Inventory | 101,000 | Wingler, capital (30%) | 120,000 | ||
| Land | 85,000 | Norris, capital (10%) | 88,000 | ||
| Building and equipment (net) | 168,000 | Rodgers, capital (20%) | 74,000 | ||
| Guthrie, capital (40%) | 60,000 | ||||
| Total assets | $ | 451,000 | Total liabilities and capital | $ | 451,000 |
When the liquidation commenced, liquidation expenses of $16,000 were anticipated as being necessary to dispose of all property.
Prepare a predistribution plan for this partnership.
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