Advanced Accounting
12th Edition
ISBN: 9781305084858
Author: Paul M. Fischer, William J. Tayler, Rita H. Cheng
Publisher: Cengage Learning
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Chapter 14, Problem 7.4E
To determine
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The amount for which non-cash assets should be sold to pay all liabilities, distribution and B’s personal liability.
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Twelve years ago, Adams, Boyd, and Chambers formed a partnership manufacturing small circuit boards. Unfortunately, foreign competition, a softening economy, and management errors have led the partners to realize that the company’s business cannot be sustained and that the partnership must be liquidated. A condensed balance sheet is as follows:(attached)Boyd is extremely concerned that after liquidation of the partnership they would still continue to be personally insolvent. This would be devastating to Boyd, and they have come to you with their concerns.Prepare a response to each of Boyd’s independent questions noting that profits and losses are allocated 40%, 20%, and 20% to Adams, Boyd, and Chambers, respectively.1. If assets with a book value of $180,000 were sold for $200,000 and the partners agreed to maintain a minimum cash balance of $5,000, would any of the available cash be distributed to Boyd?2. If all of the noncash assets were sold for net proceeds of $280,000 and all cash…
The ZODIAC Partnership has suffered financially due to poor results of operations for the past three years. Lyon, Virgo, and Aquarius share profits and losses 40%, 20%, and 40%, respectively. Disillusioned by the setback, the partners are considering the liquidation of their partnership. The following condensed partnership statement of financial position as of December 31, 2020, the end of the calendar year. As of December 31,, 2020. Zodiac PartnershipStatement of financial position. Assets; Cash: ₱30000, Inventories:₱40000, Furniture and Fixture: ₱300000, Total Assets: ₱370000. Liabilities and partner's equity: accounts payable:₱49000, lyon loan:₱20000 Lyon Capital:₱95000 Virgo Capital:₱100000, Aqarius capital:₱106000, Total Liabilities and Partner's equity:₱370000. Additional information: All of the non-cash assets are sold for P40,000. Lyon and Virgo are personally solvent while Aquarius is personally insolvent. Required: A. Prepare the statement of liquidation B. Prepare the…
The partnership of Gordon, Handel, and Mitchell is considering possible liquidation because partner Mitchell is personally insolvent. The partners have the following capital account balances: $120,000, $140,000, and $80,000, respectively, and share profits and losses 35%, 45%, and 20%, respectively. The partnership has $400,000 in noncash assets that can be sold for $300,000. The partnership has $20,000 cash on hand, and $80,000 in liabilities. What is the minimum that partner Mitchell’s creditors would receive if they have filed a claim for $100,000?
A. 0
B. 20,000
C. 60,000
D. 80,000
E. 100,000
Chapter 14 Solutions
Advanced Accounting
Ch. 14 - Prob. 1UTICh. 14 - Prob. 2UTICh. 14 - Prob. 3UTICh. 14 - Prob. 4UTICh. 14 - Prob. 2ECh. 14 - Prob. 3ECh. 14 - Prob. 4.1ECh. 14 - Prob. 4.2ECh. 14 - Prob. 4.3ECh. 14 - Prob. 4.4E
Ch. 14 - Prob. 4.5ECh. 14 - Prob. 5.1ECh. 14 - Prob. 5.2ECh. 14 - Prob. 6ECh. 14 - Prob. 7.1ECh. 14 - Prob. 7.2ECh. 14 - Prob. 7.3ECh. 14 - Prob. 7.4ECh. 14 - Prob. 8.1ECh. 14 - Prob. 8.2ECh. 14 - Prob. 8.3ECh. 14 - Prob. 9.1ECh. 14 - Prob. 9.2ECh. 14 - Prob. 9.3ECh. 14 - Prob. 9.4ECh. 14 - Prob. 14.2.1PCh. 14 - Prob. 14.2.2PCh. 14 - Prob. 14.2.3PCh. 14 - Prob. 14.2.4PCh. 14 - Prob. 14.2.5PCh. 14 - Prob. 14.2.6PCh. 14 - Prob. 14.2.7PCh. 14 - Prob. 14.2.8PCh. 14 - Prob. 14.2.9PCh. 14 - Prob. 14.3.1PCh. 14 - Prob. 14.3.2PCh. 14 - Prob. 14.3.3PCh. 14 - Prob. 14.3.4PCh. 14 - Prob. 14.3.5PCh. 14 - Prob. 14.3.6PCh. 14 - Prob. 14.5PCh. 14 - Prob. 14.6PCh. 14 - Prob. 14.7P
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