Martha Wheaton, Bess Chen, and Sam Smith were partners in an urban Calgary tea shop called Wake and showed the following account balances as of December 31, 2023: Account balances December 31, 2023 Due to difficulties, the partners decided to liquidate the partnership. The land and building were sold for $700,000 on January 1, 2024. The partners share any profit (loss) in the ratio of 2:1:1 for Wheaton, Chen, and Smith, respectively. Account balances December 31, 2023 Sale of land and building Balance Payment of liabilities Balance Accum. Deprec. Building Accounts Payable Cash Building Land $191,000 $838,000 $487,000 $215,000 $135,000 Required: Complete the schedule. Prepare the entry to distribute the remaining cash to the partners assuming any deficiencies are paid by the partners. (Negative answers should be indicated by a minus sign.) Absorption of deficiency Balance Accum. Deprec. Building $191,000 $ 838,000 $ 487,000 $ 215,000 $ Cash Building $191,000 $ 838,000 $ Land $191,000 $ 838,000 $ 487,000 $ 215,000 $ 487,000 $ Accounts Payable 215,000 $ $191,000 $ 838,000 $ 487,000 $ 215,000 $ Martha Bess Sam Chen, Wheaton, Capital Smith, Capital Capital $330,000 $(59,000) $351,000 Martha Wheaton, Capital 135,000 $ 135,000 $ 135,000 $ 330,000 $ 330,000 $ Bess Chen, Capital (59,000) $ (59,000) $ 330,000 $ 135,000 $ (59,000) $ Sam Smith, Capital 351,000 351,000 351,000 330,000 $ (59,000) $ 351,000
Martha Wheaton, Bess Chen, and Sam Smith were partners in an urban Calgary tea shop called Wake and showed the following account balances as of December 31, 2023: Account balances December 31, 2023 Due to difficulties, the partners decided to liquidate the partnership. The land and building were sold for $700,000 on January 1, 2024. The partners share any profit (loss) in the ratio of 2:1:1 for Wheaton, Chen, and Smith, respectively. Account balances December 31, 2023 Sale of land and building Balance Payment of liabilities Balance Accum. Deprec. Building Accounts Payable Cash Building Land $191,000 $838,000 $487,000 $215,000 $135,000 Required: Complete the schedule. Prepare the entry to distribute the remaining cash to the partners assuming any deficiencies are paid by the partners. (Negative answers should be indicated by a minus sign.) Absorption of deficiency Balance Accum. Deprec. Building $191,000 $ 838,000 $ 487,000 $ 215,000 $ Cash Building $191,000 $ 838,000 $ Land $191,000 $ 838,000 $ 487,000 $ 215,000 $ 487,000 $ Accounts Payable 215,000 $ $191,000 $ 838,000 $ 487,000 $ 215,000 $ Martha Bess Sam Chen, Wheaton, Capital Smith, Capital Capital $330,000 $(59,000) $351,000 Martha Wheaton, Capital 135,000 $ 135,000 $ 135,000 $ 330,000 $ 330,000 $ Bess Chen, Capital (59,000) $ (59,000) $ 330,000 $ 135,000 $ (59,000) $ Sam Smith, Capital 351,000 351,000 351,000 330,000 $ (59,000) $ 351,000
Chapter11: Partnerships: Distributions, Transfer Of Interests, And Terminations
Section: Chapter Questions
Problem 27P
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