E 17-1 Simple liquidation—Schedule of cash available The partnership of Flo and Fay is in the process of liquidation. On January 1, 2016, the ledger shows account balances as follows: Cash $10,000 Accounts payable $25,000 Accounts receivable 45,000 Flo capital 45,000 Lumber inventory 50,000 Fay capital 35,000 On January 10, 2016, the lumber inventory is sold for $40,000, and during January, accounts receivable of $41,000 is collected. No further collections on the receivables are expected. Profits are shared 60 percent to Flo and 40 percent to Fay. Required Prepare a schedule showing how the cash available on February 1, 2016, should be distributed.
E 17-1 Simple liquidation—Schedule of cash available The partnership of Flo and Fay is in the process of liquidation. On January 1, 2016, the ledger shows account balances as follows: Cash $10,000 Accounts payable $25,000 Accounts receivable 45,000 Flo capital 45,000 Lumber inventory 50,000 Fay capital 35,000 On January 10, 2016, the lumber inventory is sold for $40,000, and during January, accounts receivable of $41,000 is collected. No further collections on the receivables are expected. Profits are shared 60 percent to Flo and 40 percent to Fay. Required Prepare a schedule showing how the cash available on February 1, 2016, should be distributed.
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 5SEA: ENTRIES: PARTNERSHIP LIQUIDATION On liquidation of the partnership of J. Hui and K. Cline, as of...
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E 17-1 Simple liquidation—Schedule of cash available
The
|
Cash |
$10,000 |
Accounts payable |
$25,000 |
|
Accounts receivable |
45,000 |
Flo capital |
45,000 |
|
Lumber inventory |
50,000 |
Fay capital |
35,000 |
On January 10, 2016, the lumber inventory is sold for $40,000, and during January, accounts receivable of $41,000 is collected. No further collections on the receivables are expected. Profits are shared 60 percent to Flo and 40 percent to Fay.
Required
Prepare a schedule showing how the cash available on February 1, 2016, should be distributed.
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