On August 3, the firm of Chapelle, Rock, and Pryor decided to liquidate its partnership. The partners have capital balances of $61,000, $87,000, and $14,000, respectively. The cash balance is $28,000, the book values of noncash assets total $178,000, and liabilities total $44,000. The partners share income and losses in the ratio of 2:2:1. Required: 1. Prepare a statement of partnership liquidation, covering the period August 3-29, for each of the following independent assumptions: a. All of the noncash assets are sold for $242,000 in cash, the creditors are paid, and the remaining cash is distributed to the partners. Enter any subtractions (balance deficiencies, payments, cash distributions, divisions of loss, sale of assets) as negative numbers using a minus sign. If there is no amount or an amount is zero, enter "0". Chapelle, Rock, and Pryor Statement of Partnership Liquidation For Period August 3-29 Cash Noncash Assets Liabilities Capital Chapelle (2/5) Capital Rock (2/5) Capital Pryor C %3D Balances before realization Sale of assets and division of gain Balances after realization Payment of liabilities Balances after payment of liabilities Cash distributed to partners Final balances
On August 3, the firm of Chapelle, Rock, and Pryor decided to liquidate its partnership. The partners have capital balances of $61,000, $87,000, and $14,000, respectively. The cash balance is $28,000, the book values of noncash assets total $178,000, and liabilities total $44,000. The partners share income and losses in the ratio of 2:2:1. Required: 1. Prepare a statement of partnership liquidation, covering the period August 3-29, for each of the following independent assumptions: a. All of the noncash assets are sold for $242,000 in cash, the creditors are paid, and the remaining cash is distributed to the partners. Enter any subtractions (balance deficiencies, payments, cash distributions, divisions of loss, sale of assets) as negative numbers using a minus sign. If there is no amount or an amount is zero, enter "0". Chapelle, Rock, and Pryor Statement of Partnership Liquidation For Period August 3-29 Cash Noncash Assets Liabilities Capital Chapelle (2/5) Capital Rock (2/5) Capital Pryor C %3D Balances before realization Sale of assets and division of gain Balances after realization Payment of liabilities Balances after payment of liabilities Cash distributed to partners Final balances
Chapter11: Partnerships: Distributions, Transfer Of Interests, And Terminations
Section: Chapter Questions
Problem 4BCRQ
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Concept explainers
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is 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, drawings of a partner, etc.
Question
Transcribed Image Text:On August 3, the firm of Chapelle, Rock, and Pryor decided to liquidate its partnership. The partners have capital balances of $61,000, $87,000, and $14,000,
respectively. The cash balance is $28,000, the book values of noncash assets total $178,000, and liabilities total $44,000. The partners share income and losses in the
ratio of 2:2:1.
Required:
1. Prepare a statement of partnership liquidation, covering the period August 3-29, for each of the following independent assumptions:
a. All of the noncash assets are sold for $242,000 in cash, the creditors are paid, and the remaining cash is distributed to the partners. Enter any subtractions (balance
deficiencies, payments, cash distributions, divisions of loss, sale of assets) as negative numbers using a minus sign. If there is no amount or an amount is zero, enter "0".
Chapelle, Rock, and Pryor
Statement of Partnership Liquidation
For Period August 3-29
Cash
Noncash Assets
Liabilities
+ Capital Chapelle (2/5) + Capital Rock (2/5) + Capital Pryor (
Balances before realization
Sale of assets and division of gain
Balances after realization
2$
$
Payment of liabilities
Balances after payment of liabilities
24
$
Cash distributed to partners
Final balances
b. All of the noncash assets are sold for $80,000 in cash, the creditors are paid, the partner with the debit capital balance pays the amount owed to the firm, and the
distributed
Entor any
ationa (ba
onsies
anah distributionscivicions of less
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