ADVANCED ACCOUNTING
13th Edition
ISBN: 9781260773033
Author: Hoyle
Publisher: MCG
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Chapter 15, Problem 22P
To determine
Prepare a predistribution plan for liquidating the
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The partnership of Larson, Norris, Spencer, and Harrison has decided to terminate
operations and liquidate all business property. During this process, the partners expect
to incur $8,000 in liquidation expenses. All partners are currently solvent.
The balance sheet reported by this partnership at the time that the liquidation
commenced follows. The percentages indicate the allocation of profits and losses to
each of the four partners.
Cash
Accounts
receivable
Inventory
Land and
buildings
Equipment
Total assets
$28,250 Liabilities
44,000 Larson, capital (20%)
39,000
Norris, capital (30%)
23,000 Spencer, capital (20%)
104,000 Harrison, capital (30%)
$238,250
Total liabilities and
capital
$ 47,000
15,000
60,000
75,000
41,250
$238,250
A Statement of Financial Position for the partnership of John, Paul and Ryan, who share profits in
the ratio of 2:1:1, shows the following balances just before liquidation:
Assets
Cash
Other assets
Liabilities and Equity
Liabilities
240,000
P 144,000
714,000
John, capital
264,000
186,000
Paul, capital
Ryan, capital
168,000
In the first month of liquidation, certain assets are sold for P384,000. Liquidation expenses of
P12,000 are paid, and additional expenses are anticipated. Liabilities of P64,800 are paid and
sufficient cash is retained for the anticipated liquidation expenses. In the first payment to partners,
John receives P60,000.
How much is the theoretical losses in the first month of liquidation?
P
The partnership of Larson, Norris, Spencer, and Harrison has decided to terminate operations and liquidate all business property. During this process, the partners expect to incur $8,000 in liquidation expenses. All partners are currently solvent.The balance sheet reported by this partnership at the time that the liquidation commenced follows. The percentages indicate the allocation of profits and losses to each of the four partners.
Cash . . . . . . . . . . . . . . . . . . . $ 28,250 Liabilities . . . . . . . . . . . . . . . $ 47,000Accounts receivable . . . . . 44,000 Larson, capital (20%) . . . . . . . 15,000Inventory . . . . . . . . . . . . . . . 39,000 Norris, capital (30%) . . . . . . 60,000Land and buildings . . . . . . 23,000 Spencer, capital (20%) . . . 75,000Equipment . . . . . . . . . . . . . . 104,000 Harrison, capital (30%) . . . . 41,250
Based on the information provided, prepare a predistribution plan for liquidating this partnership.
Chapter 15 Solutions
ADVANCED ACCOUNTING
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. 6QCh. 15 - Prob. 7QCh. 15 - Prob. 8QCh. 15 - What is the purpose of a proposed schedule of...Ch. 15 - Prob. 10Q
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. 19PCh. 15 - The following balance sheet is for a local...Ch. 15 - Prob. 21PCh. 15 - Prob. 22PCh. 15 - Prob. 23PCh. 15 - Prob. 24PCh. 15 - Prob. 25PCh. 15 - Prob. 26PCh. 15 - March, April, and May have been in partnership for...Ch. 15 - Prob. 28PCh. 15 - Prob. 29PCh. 15 - Prob. 30PCh. 15 - Prob. 31PCh. 15 - Prob. 32PCh. 15 - Prob. 33P
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