March, April, and May have been in partnership for a number of years. The partners allocate all profits and losses on a 3:3:2 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) Total assets $ 22,000 106, 000 85,000 49,000 $262,000 Liabilities March, capital April, capital May, capital Total liabilities and capital $ 83,000 36,000 86,000 57,000 $262,000 Prepare journal entries for the following transactions: (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

March, April, and May have been in partnership for a number of years. The partners allocate all profits and losses on a 3:3:2 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) Total assets $ 22,000 106, 000 85,000 49,000 $262,000 Liabilities March, capital April, capital May, capital Total liabilities and capital $ 83,000 36,000 86,000 57,000 $262,000 Prepare journal entries for the following transactions: (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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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March, April, and May have been in partnership for a number of years. The partners allocate all profits and losses on a 2:3:1 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) Total assets a. Sold all inventory for $73,000 cash. b. Paid $12,600 in liquidation expenses. $ 28,000 118,000 97,000 64,000 $ 307,000 c. Paid $57,000 of the partnership's liabilities. d. Collected $68,000 of the accounts receivable. Prepare journal entries for the following transactions: (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Liabilities March, capital April, capital May, capital Total liabilities and capital e.…
March, April, and May have been in partnership for a number of years. The partners allocate all profits and losses on a 2:3:1 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 balances are as follows: Cash . . . . . . . . . . . . . . . . . . . $ 11,000 Liabilities . . . . . . . . . . . . . . . $ 61,000Accounts receivable . . . . . 84,000 March, capital . . . . . . . . . . . . 25,000Inventory . . . . . . . . . . . . . . . 74,000 April, capital . . . . . . . . . . . . 75,000Land, building, and equipment (net) . . . . . . . 38,000 May, capital . . . . . . . . . . . . 46,000 Prepare journal entries for the following transactions:a. Sold all inventory for $56,000 cash.b. Paid $7,500 in liquidation expenses.c. Paid $40,000 of the partnership’s liabilities.d. Collected $45,000 of the accounts receivable.e.…
March, April, and May have been in partnership for a number of years. The partners allocate all profits and losses on a 2:3:1 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 $ 18,000 Liabilities $ 66,000 Accounts receivable 98,000 March, capital 32,000 Inventory 75,000 April, capital 82,000 Land, building, and equipment (net) 42,000 May, capital 53,000 Total assets $ 233,000 Total liabilities and capital $ 233,000 Prepare journal entries for the following transactions: (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Sold all inventory for $63,000 cash. Paid $9,600 in liquidation expenses. Paid $47,000 of the…
March, April, and May have been in partnership for a number of years. The partners allocate all profits and losses on a 2:3:1 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: Prepare journal entries for the following transactions: Sold all inventory for $56,000 cash. Paid $7,500 in liquidation expenses. Paid $40,000 of the partnership’s liabilities. Collected $45,000 of the accounts receivable. Distributed safe cash balances; the partners anticipate no further liquidation expenses. Sold remaining accounts receivable for 30 percent of face value. Sold land, building, and equipment for $17,000. Paid all remaining liabilities of the partnership. Distributed cash held by the business to the partners.
March, April, and May have been in partnership for a number of years. The partners allocate all profits and losses on a 4:2:2 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: $ 31,000 $ 108,000 59,000 95,000 66,000 Cash Liabilities March, capital April, capital May, capital Total liabilities and capital Accounts receivable Inventory Land, building, and equipment (net) 124,000 100,000 73,000 Total assets $ 328,000 $ 328,000 Prepare journal entries for the following transactions: (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) a. Sold all inventory for $76,000 cash. b. Paid $13,500 in liquidation expenses. c. Paid $60,000 of the partnership's liabilities. d. Collected…
Adjani, Malcolm, and Shanice have been in partnership for over forty years. They are now ready to retire and have decided to dissolve the partnership on March 31, 2021. The balance sheet at that date stood as follows: iii. iv. ASSETS Non-current assets Buildings Furniture Statement of Financial Position as at 31 March Current assets Inventory Trade receivables Allowance for doubtful accounts A. Bank Total current assets Total assets EQUITY AND LIABILITIES Capital -Adjani Capital - Malcolm Capital - Shanice C. Current a/c - Adjani Current a/c - Malcolm Current a/c - Shanice Additional information: Long-Term Liabilities Loan Current Liabilities Creditors Required: Prepare the following: a. Buildings realized $180,000 b. Debtors $233, 600 c. Inventory $83,000 Realization account B. Partners' capital accounts $ Bank account 2020 i. Adjani took over the furniture at an agreed value of $10,000 ii. Of the remaining assets: 250,000 15,000 $ 50,000 200,000.00 3,000 12,000.00 212,000.00 83,000…
Financi (xii) At the end of the first month, they each took $2,000 out of the bank account as a personal withdrawal. (xiii) Their best estimate of depreciation on the van and the catering equipment was $500 for the month. would be recorded in the partnership's accounting records. Indicate the Use the accounting equation to show how each of the above transactions effect of each one on assets, liabilities, and equity.
The Pen, Evan, and Torves Partnership has asked you to assist in winding-up its business affairs. You compile the following information: 1. The partnership's trial balance on June 30, 20X1, Is Cash Accounts Receivable (net) Inventory Plant and Equipment (net) Accounts Payable Pen, Capital Evan, Capital Torves, Capital Total Profit and loss percentages Preliquidation capital balances Loss absorption potential (capital balances / loss percent) Decrease highest LAP to next highest: Debit $ 6,800 30,000 22,000 99,700 Decrease LAPS to next highest: $ 158,500 2. The partners share profits and losses as follows: Pen, 50 percent; Evan, 30 percent; and Torves, 20 percent. 3. The partners are considering an offer of $108,000 for the firm's accounts receivable, Inventory, and plant and equipment as of June 30. The $108,000 will be paid to creditors and the partners in Installments, the number and amounts of which are to be negotiated. Required: Prepare a cash distribution plan as of June 30,…
On October 1, 20Y8, Jacinto Suarez and Tricia Fritz form a partnership. Suarez agrees to invest $20,890 in cash and inventory valued at $56,320. Fritz invests certain business assets at valuations agreed upon, transfers business liabilities, and contributes sufficient cash to bring Fritz's total capital to $59,510. Details regarding the book values of the business assets and liabilities, and the agreed valuations, follow: Accounts Receivable Allowance for Doubtful Accounts Equipment Accumulated Depreciation-Equipment Accounts Payable Notes Payable (current) Fritz's Ledger Balance $19,150 1,140 83,410 29,490 14,740 35,850 Agreed-Upon Valuation $18,230 1,500 55,190 14,740 35,850 The partnership agreement includes the following provisions regarding the division of net income: interest on original investments at 10%, salary allowances of $22,150 (Suarez) and $30,150 (Fritz), and the remainder equally. Required: 1. Journalize the entries to record the investments of Suarez and Fritz in the…
Kim, Nicolas, and Troy are general partners in KNT Partnership sharing profits and losses in the ratio of 2:4:4, respectively. The partnership suffered financial distress and the partners decided to liquidate the partnership in December 2019. Accounts, after revaluation, adjustment, and correction, had the following ledger balances: Cash P 90,000 Accounts Receivable 205,000 Allowance for Doubtful Accounts 5,000 Merchandise Inventory 180,000 Equipment Accumulated Depreciation Equipment Accounts Payable Kim, Loan [Loan Payable - Kim] Troy, Loan [Loan Payable Troy] Kim, Capital Nicolas, Capital Troy, Capital 600,000 102,000 182,000 18,000 90,000 100,000 213,000 365,000 For the independent cases that follow in the course of winding up, prepare a statement of liquidation and necessary journal entries to record the liquidation process: A. The entire net receivable was collected, all inventories were sold at cost, and equipment was sold at its carrying value. B. Only 90% of net receivable was…
Gloria Detoya and Esterlina Gevera have operated a successful partnership for years, sharing profit and losses equally. Evangelina Madelo is to be admitted to the partnership on June 1 of the current year, in accordance with the following agreement: many a. Assets and liabilities of the old partnership are to be valued at their book values of May 31, except for the following: Accounts receivable amounting to P20,000 are to be written off, and the allowance for uncollectible accounts is to be increased to 5% of the remaining accounts. Merchandise inventory is to be valued at P638,700. Equipment is to be valued at P900,000. b. Madelo is to purchase P300,000 of the ownership interest of Gevera for P375,000 cash and to contribute P350,000 cash to the partnership for a total ownership equity of P650,000. c. The income-sharing ratio of Detoya, Gevera, and Madelo is to be 2:1:1. The post-closing trial balance of Detoya and Gevera as of May 31 follows: Detoya and Gevera Post-Closing…
Brian Caldwell and Adriana Estrada have operated a successful firm for many years, sharing net income and net losses equally. Kris Mays is to be admitted to the partnership on September 1 of the current year, in accordance with the following agreement: a. Assets and liabilities of the old partnership are to be valued at their book values as of August 31, except for the following: • Accounts receivable amounting to $1,500 are to be written off, and the allowance for doubtful accounts is to be increased to 5% of the remaining accounts. • Merchandise inventory is to be valued at $46,800. • Equipment is to be valued at $64,500. b. Mays is to purchase $26,000 of the ownership interest of Estrada for $30,000 cash and to contribute $32,000 cash to the partnership for a total ownership equity of $58,000. The post-closing trial balance of Caldwell and Estrada as of August 31 follows: Caldwell and Estrada Post-Closing Trial Balance August 31, 20Y9 Debit Balances Credit Balances Cash 12,300…