3. Cheese Partners has decided to close the store. At the date of closing, Cheese Partners had the following account balances: $ 9,000 $ 6,000 $15,000 $10,000 $22,000 Capital Cash Inventory Store fixtures Accounts payable A competitor agrees to buy the inventory and store fixtures for $20,000. Prepare the journal entries detailing the liquidation, assuming that partners Colette and Swarma are sharing profits on a 50:50 basis.
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- Cheese Partners has decided to close the store. At the date of closing, Cheese Partners had the following account balances: Capital $8,000 Cash 8,000 Inventory 12,000 Store fixtures 8,000 Accounts payable 22,000 A competitor agrees to buy the inventory and store fixtures for $15,000. Prepare the journal entries detailing the liquidation, assuming that partners Colette and Swarma are sharing profits on a 50:50 basis. If an amount box does not require an entry, leave it blank.Cheese Partners has decided to close the store. At the date of closing, Cheese Partners had the following account balances: Capital $8,000 Cash 6,000 Inventory 12,000 Store fixtures 8,000 Accounts payable 22,000 A competitor agrees to buy the inventory and store fixtures for $15,000. Prepare the journal entries detailing the liquidation, assuming that partners Colette and Swarma are sharing profits on a 50:50 basis. If an amount box does not require an entry, leave it blank. Cash Cash Loss on Sale Loss on Sale Inventory Inventory Store Fixtures Store Fixtures Colette, Capital Colette, Capital Swarma, Capital Swarma, Capital Loss on Sale Loss on Sale Accounts Payable Accounts Payable Cash Cash Colette, Capital Colette, Capital Swarma, Capital Swarma, Capital Cash CashApple, Banana, and Pear partnership began the liquidation process with the following balance sheet (profit and loss sharing percentages are in parenthesis): Cash $30,000 Liabilities $150,000 Noncash Assets $400,000 Apple Capital $100,000 (30%) Banana Capital $ 60,000 (20%) Pear Capital $120,000 (50%) A. If the noncash assets are sold for $250,000 what amount of the loss will be allocated to Apple? B. If the noncash assets are sold for only $100,000 which partner(s) capital accounts will be in a deficit balance and require a contribution of assets to the partnership? Answer a and b both, please.
- Radcliffe, Sonders, and Towers, who share in income and losses in the ratioof 2:3:5, decided to discontinue operations as of April 20 and liquidate theirpartnership. After the accounts were closed on April 20, the following trialbalance was prepared:Cash 5,900Noncash Assets 109,900Liabilities 26,800Radcliffe, Capital 14,600Sonders, Capital 27,900Towers, Capital 46,500Total115,800 115,800Ms. Drake sold a business that she had operated as a sole proprietorship for 18 years. On date of sale, the business balance sheet showed the following assets: Accounts receivable: 42,250 Inventory: 149,600 Furniture and Equipment: 63,750 Accumulated Depreciation: (51,000) Leashold Improvements: 23,000 Accumulated Amortization: (4,600) The purchaser paid a lump-sum price of $316,500 cash for the business. The sales contract stipulates that the FMV of the business inventory is $154,000, and the FMV of the remaining balance sheet assets equals adjusted tax basis. Assuming that Ms. Drake’s marginal tax rate on ordinary income is 35 percent and her rate on capital gain is 15 percent, compute the net cash flow from the sale of her business.Lester, Torres, and Hearst are members of Arcadia Sales, LLC, sharing income and losses in the ratio of 2:2:1, respectively. The members decide to liquidate the limited liability company. The members’ equity prior to liquidation and asset realization on August 1 are as follows: Lester $ 49,000 Torres 61,000 Hearst 27,000 Total $137,000In winding up operations during the month of August, noncash assets with a book value of $146,000 are sold for $158,000, and liabilities of $35,000 are satisfied. Prior to realization, Arcadia Sales has a cash balance of $26,000.a. Prepare a statement of LLC liquidation.b. Provide the journal entry for the final cash distribution to members.c. What is the role of the income- and loss-sharing ratio in liquidating an LLC?
- Lester, Torres, and Hearst are members of Arcadia Sales, LLC, sharing income and losses in the ratio of 2:2:1, respectively. The members decide to liquidate the limited liability company. The members' equity prior to liquidation and asset realization on August 1 are as follows: Lester $28,800 Torres 66,600 Hearst 41,400 Total $136,800 In winding up operations during the month of August, noncash assets with a book value of $180,000 are sold for $223,200, and liabilities of $58,800 are satisfied. Prior to realization, Arcadia Sales has a cash balance of $15,600.Partners Ong, Rodriguez, Pamittan and Reyes who share profits andlosses at 30%, 30%, 20% and 20%, respectively, decided to liquidate. Allpartnership assets are to be converted into cash. Before liquidation, thecondensed statement of financial position follows:Cash P100, 000 Liabilities P750, 000Other Assets 1, 800, 000 Rodriguez, Loan 60, 000Reyes, Loan 50, 000Ong, Capital 420, 000Rodriguez, Capital 315, 000Pamittan, Capital 205, 000Reyes, Capital 100, 000Total P1, 900,000P1, 900,000The non-cash assets realized P800, 000, resulting to a loss of P1, 000,000. All the partners are solvent, and can contribute any additional cash tocover any deficiency. In the process of liquidation, deficiencies will occur andwill require additional investment as follows:a. Pamittan at P7, 500b. Reyes at P50, 000c. Reyes and Pamittan for P50, 000 and P7, 500, respectivelyd. NoneThe statement of Financial Position of Highschool Kids, just before liquidation is as follows: Assets Liabilities & Capital Cash 50,000 Liabilities 70,000 Other assets 140,000 Loan, Young 20,000 Loans to Broke 10,000 Young, capital (50%) 30,000 Dumb, capital (30%) 50,000 Broke, capital (20%) 30,000 Total 200,000 Total 200,000 The partners Young and Dumb are personally insolvent. If non cash assets are sold for P150,000 and all liabilities are paid and liquidation expense of P5,000 are also paid, how much cash should Young, Dumb and Broke receive? Young Dumb Broke A. 32,500 51,500 31,000 B. 55,000 53,000 22,000 C. 52,500 51,500 21,000 D. 47,500 48,500 19,000
- SG Company is bankrupt and has undergone corporate liquidation. Presented below is its statement of financial position before the start of liquidation (see attached photo):· Liquidation expenses amounting to P600,000 were paid.· The loan payable is secured by the Machinery with fair value of P300,000.· The mortgage payable is secured by the building.· At the end of liquidation, the holder of loan payable received P340,000.Using the information of SG Company, what is the fair value of the building?The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to liquidation: Liquidation expenses are estimated to be $15,000. Prepare a predistribution schedule to guide the distribution of cash. Assume that assets costing $74,000 are sold for $60,000. How is the available cash to be divided?Marter Co. filed a bankruptcy petition and liquidated its noncash assets. Marter was paying forty cents on the dollar for unsecured claims. Keenan Co. held a mortgage of $150,000 on Marter's land which was sold for $110,000. The total amount of payment that Keenan should have received is calculated to be Select one: a.$150,000. b.$126,000. c.$44,000. d.$60,000. e.$110,000.