ADVANCED ACCT CUSTOM W/CONNECT
14th Edition
ISBN: 9781307697711
Author: Hoyle
Publisher: MCG/CREATE
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Question
Chapter 15, Problem 15P
To determine
Identify the amount of safe payment that can be made to each partner if a preliminary distribution of cash is to be made.
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If the partnership’s cash is 25,000, the net assets are 250,000 and the total claim of the outsidecreditors is 200,000, the total amount of the noncash assets woud be
A. 525,000B. 425,000C. 325,000D. 275,000
A local partnership is liquidating and has only two assets (cash of $10,000 and land with a cost of $35,000). All partnership liabilities have been paid. All partners are personally insolvent. The partners have capital balances and share profits and losses as follows.
Brown, capital (40%) . . . . . . . $ 25,000Fish, capital (30%) . . . . . . . . . . 15,000Stone, capital (30%) . . . . . . . . . 5,000
a. If the land is sold for $25,000, how much cash does each partner receive in a final settlement?b. If the land is sold for $15,000, how much cash does each partner receive in a final settlement?c. If the land is sold for $5,000, how much cash does each partner receive in a final settlement?
The partnership of Peter, Paul and Mary share profits and losses in the ratio of 4:4:2 respectively. The partners voted to dissolve the partnership when its assets, liabilities and capital were as follows:
Cash …………………………. P 250,000
Non-cash assets………………. 1,000,000
Total assets …………………. P 1,250,000
Liabilities ……………………………………. P 200,000
Peter, Capital ………………………………… 300,000
Paul, Capital …………………………………. 350,000
Mary, Capital …..……………………………. 400,000
Total liabilities and capital ……………..… P 1,250,000
The partnership will be liquidated over a prolonged period of time. As cash is available, it will be distributed to the partners. The first sale of non-cash assets having a book value of P600,000 realized P475,000. How much cash should be distributed to each partner after this sale?
a. Peter – P90,000; Paul – P140,000; Mary – P 295,000
b. Peter – P210,000; Paul – P290,000; Mary – P 145,000
c. Peter – P290,000; Paul – P210,000; Mary – P 105,000
d. Peter – P150,000; Paul – P175,000; Mary – P…
Chapter 15 Solutions
ADVANCED ACCT CUSTOM W/CONNECT
Ch. 15 - Prob. 1QCh. 15 - Prob. 2QCh. 15 - Prob. 3QCh. 15 - Prob. 4QCh. 15 - What is the purpose of a statement of liquidation?...Ch. 15 - Prob. 1PCh. 15 - Prob. 2PCh. 15 - Prob. 3PCh. 15 - Prob. 4PCh. 15 - A partnership is considering possible liquidation...
Ch. 15 - What is a predistribution plan? a. A list of the...Ch. 15 - Prob. 7PCh. 15 - Prob. 8PCh. 15 - Prob. 9PCh. 15 - Prob. 10PCh. 15 - Prob. 11PCh. 15 - Prob. 12PCh. 15 - Prob. 13PCh. 15 - Prob. 14PCh. 15 - Prob. 15PCh. 15 - Prob. 16PCh. 15 - Prob. 17PCh. 15 - Prob. 18PCh. 15 - Prob. 25PCh. 15 - Prob. 26PCh. 15 - March, April, and May have been in partnership for...Ch. 15 - Prob. 28PCh. 15 - Prob. 29P
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- A partnership currently holds three assets: cash, $10,000; land, $35,000; and a building, $50,000. The partnership has no liabilities. The partners anticipate that expenses required to liquidate their partnership will amount to $5,000. Capital balances are: Ace, capital . . . . . . . . . . . . . . $ 25,000Ball, capital . . . . . . . . . . . . . .. . 28,000Eaton, capital . . . . . . . . . . . . . . 20,000Lake, capital . . . . . . . . . . . . . . . 22,000 The partners share profits and losses as follows: Ace (30 percent), Ball (30 percent), Eaton (20 percent), and Lake (20 percent). If a preliminary distribution of cash is to be made, what is the amount of safe payment that can be made to each partner?arrow_forwardA partnership currently holds three assets: cash, $10,000; land, $35,000; and a building, $50,000. The partnership has no liabilities. The partners anticipate that expenses required to liquidate their partnership will amount to $5,000. Capital balances are The partners share profits and losses as follows: Ace (30 percent), Ball (30 percent), Eaton (20 percent), and Lake (20 percent). If a preliminary distribution of cash is to be made, what is the amount of safe payment that can be made to each partner?arrow_forwardA partnership is currently holding $200,000 in assets and $120,000 in liabilities. The partnership is to be liquidated, and $20,000 is the best estimation of the expenses that will be incurred during the process. The capital balances of the two partners at the start of the liquidation and the profit and loss ratios are shown below. Kevin, Capital (40% of gains and losses)……………………………….…....$20,000 Michael, Capital (60% of gains and losses)………………………………….$60,000 The partners realize that Michael will be the first partner to start receiving cash. How much cash will Michael receive before Kevin collects any cash?arrow_forward
- The following balances is for a local partnership in which the partners have become very unhappy with each other. Cash . . . . . . . . . . . . . . . . . . . $ 40,000 Liabilities . . . . . . . . . . .. . . . . $ 30,000Land . . . . . . . . . . . . . . . . . . . 130,000 Adams, capital . . . . . . . . . . . 80,000Building . . . . . . . . . . . . . . . . 120,000 Baker, capital . . . . . . . . . . . . . . . . 30,000Carvil, capital . . . . . . . . . . . . . 60,000Dobbs, capital . . . . . . . . . . . . . 90,000 To avoid more conflict, the partners have decided to cease operations and sell all assets. Using this information, answer the following questions. Each question should be viewed as an independentsituation related to the partnership’s liquidation.a. The $10,000 cash that exceeds the partnership liabilities is to be disbursed immediately. If profits and losses are allocated to Adams, Baker, Carvil, and Dobbs on a 2:3:3:2 basis, respectively, how will the $10,000 be divided?b. The $10,000…arrow_forwardA partnership has decided to liquidate its operations. Prior to beginning the liquidation process, the partnership had cash balances of $12,000 and noncash assets of $210,000. At that time liabilities were $125,000 of which $25,000 represented a note payable to Partner B. The capital information for the current partners is as follows: Partner A Partner B Partner CProfit and loss percentages . . . . . . . . . . . 50% 30% 20%Capital balances . . . . . . . . . . . . . . . . . . . .$75,000 $42,000 $(20,000)The following events occurred over the four-month liquidation period, and it was decided that all available cash would be distributed at the end of each month.Month 1—Payments of $35,000 were received on accounts receivable with a book value of $43,000, and the balance of those accounts were written off. A $12,000 allowance for uncollectible accounts was established against…arrow_forwardThe following condensed balance sheet is presented for the partnership of Der, Egan, and Oprins, who share profits and losses in the ratio of 4:3:3, respectively. Cash $ 40,000 Accounts Payable $ 150,000 Other Assets 710,000 Der, Capital 260,000 Egan, Capital 180,000 Oprins, Capital 160,000 Total Assets $750,000 Total Liabilities and Capital $ 750,000 Assume that the partnership decides to admit Snider as a new partner with a 25 percent interest. g. Other assets are revalued down by $20,000 and a bonus of $40,000 is paid to Snider at the time of admission. CREATE THE FOLLOWING JOURNAL ENTRY PLEASE: Record the revaluation of the assets and the allocation of the loss to the partnersarrow_forward
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