The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its business property. A balance sheet drawn up at this time shows the following account balances: Cash$69,000 Liabilities$40,000Noncash assets 279,000 Frick, capital (60%) 168,000 Wilson, capital (20%) 45,000 Clarke, capital (20%) 95,000Total assets$348,000 Total liabilities and capital$348,000 Part APrepare a predistribution plan for this partnership.Prepare a predistribution plan for this partnership. Frick, CapitalWilson, CapitalClarke, CapitalBeginning balances$168,000$45,000$95,000Assumed loss of Schedule 1 Step one balances Assumed loss of Schedule 2 Step two balances Assumed loss of Schedule 3 Step three balances

Answered: ) 168,000 Wilson, capital…

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter19: Accounting For Partnerships

Section: Chapter Questions

Problem 5CE

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The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its business property. A balance sheet drawn up at this time shows the following account balances:


Cash	$	69,000	Liabilities	$	40,000
Noncash assets		279,000	Frick, capital (60%)		168,000
			Wilson, capital (20%)		45,000
			Clarke, capital (20%)		95,000
Total assets	$	348,000	Total liabilities and capital	$	348,000

Part A

Prepare a predistribution plan for this partnership.

	Frick, Capital	Wilson, Capital	Clarke, Capital
Beginning balances	$168,000	$45,000	$95,000
Assumed loss of Schedule 1
Step one balances
Assumed loss of Schedule 2
Step two balances
Assumed loss of Schedule 3
Step three balances

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement 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, and drawings of a partner.

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