ADVANCED ACCOUNTING
13th Edition
ISBN: 9781264046263
Author: Hoyle
Publisher: MCG
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Chapter 15, Problem 23P
a.
To determine
Prepare a predistribution schedule to guide the distribution of cash if liquidation expenses are estimated to be $15,000.
b.
To determine
Determine how available cash is to be divided assuming that assets costing $74,000 are sold for $60,000.
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The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to liquidation:
Cash
$
37,000
Liabilities
$
49,000
Noncash assets
209,000
Drysdale, loan
12,500
Drysdale, capital (50%)
71,500
Koufax, capital (30%)
61,500
Marichal, capital (20%)
51,500
a-1. Determine the maximum loss that can be absorbed in Step 1. Then, assuming that this loss has been incurred, determine the next maximum loss that can be absorbed in Step 2.
a-2. Liquidation expenses are estimated to be $16,000. Prepare a predistribution schedule to guide the distribution of cash. Further, modify the tags in explanation as well.
b. Assume that assets costing $75,000 are sold for $60,500. How is the available cash to be divided?
The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to liquidation:
Cash
Noncash assets
$ 41,000
229,000
Liabilities
Drysdale, loan
Drysdale, capital (50%)
Koufax, capital (30%)
Marichal, capital (20%)
$46,500
21,000
77,500
67,500
57,500
a-1. Determine the maximum loss that can be absorbed in Step 1. Then, assuming that this loss has been incurred,
determine the next maximum loss that can be absorbed in Step 2.
a-2. Liquidation expenses are estimated to be $20,000. Prepare a predistribution schedule to guide the distribution of
cash. Further, modify the tags in explanation as well.
b. Assume that assets costing $79,000 are sold for $62,500. How is the available cash to be divided?
The ABC Partnership is to be liquidated. The ledger shows the following:
Cash $ 70,000
Noncash Assets 220,000
Liabilities 90,000
A, Capital 85,000
B, Capital 90,000
C, Capital 25,000
A,B, and C's income ratios are 5:3:2, respectively. The non-cash assets are sold for $170,000.
Instructions
Prepare a schedule of liquidation using the following chart:
Cash NC assets Liabilities A, Cap B, Cap C, Cap
Beg Balance
Sale of assets
Balance
Pay liabilities
Balance
Distribute cash
End Balance
Prepare the 4…
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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- The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to liquidation: $ 52,000 284,000 $ 59,000 Cash Liabilities Noncash assets Drysdale, loan Drysdale, capital (50%) Koufax, capital (30%) Marichal, capital (20%) 25,000 94,000 84,000 74,000 a-1. Determine the maximum loss that can be absorbed in Step 1. Then, assuming that this loss has been incurred, determine the next maximum loss that can be absorbed in Step 2. a-2. Liquidation expenses are estimated to be $12,000. Prepare a predistribution schedule to guide the distribution of cash. Further, modify the tags in explanation as well. b. Assume that assets costing $90,000 are sold for $68,000. How is the available cash to be divided? Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B Determine the maximum loss that can be absorbed in Step 1. Then, assuming that this loss has been incurred, determine the next maximum loss that can be absorbed in Step 2.…arrow_forwardUse the following information for the next two questions: Farewell Partnership is undergoing liquidation. Information on Farewell follows: Cash 40,000 Accounts receivable 180,000 Receivable from B 10,000 Inventory 160,000 Equipment 310,000 Total 700,000 Accrued liabilities 250,000 Payable to A 20,000 A, Capital (60%) 240,000 B, Capital (40%) 190,000 Total 700,000 Case #1: Lump-sum liquidation Information on the conversion of non-cash assets is as follows: Only 60% of the accounts receivable was collected; the balance is uncollectible. ₱50,000 was received for the entire inventory. The equipment was sold at its carrying amount. ₱10,000 Liquidation expenses were paid. Requirement: Determine the amounts of cash distributed to the partners in the final settlement of their capital…arrow_forwardA balance sheet for the partnership A, B and C, who share profits 2:1:1 respectively, shows the following balances just before liquidation: Cash - 48,000Other Assets - 238,000Liabilities - 80,000A Capital - 88,000 B Capital - 62,000C Capital - 56,000On the first month of liquidation, certain non-cash assets were sold resulting to a loss of 23,000. Liquidation expense of 4,000 were paid, and additional liquidation expenses of 3,200 are withheld to anticipate payment before liquidation is completed. After creditors were paid, partner B received 13,000 on the initial installment. Determine total payment to partners on the initial installment.arrow_forward
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- A balance sheet for the partnership of A, B, and C, who share profits 2:1:1, shows the following balances just before liquidation: Cash: P48,000Other assets: 238,000Liabilities: 80,000A, Capital: 88,000B, Capital: 62,000C, Capital: 56,000 On the first month of liquidation, certain non-cash assets were sold resulting to a loss of P23,000. Liquidation expenses of P4,000 were paid, and additional liquidation expenses of P3,200 are withheld to anticipate payment before liquidation is completed. After creditors were paid, partner B received P13,000 on the initial installment. Determine the total book value of the non-cash assets on the first month.arrow_forwardA balance sheet for the partnership of A, B, and C, who share profits 2:1:1, shows the following balances just before liquidation: Cash: P48,000Other assets: 238,000Liabilities: 80,000A, Capital: 88,000B, Capital: 62,000C, Capital: 56,000 On the first month of liquidation, certain non-cash assets were sold resulting to a loss of P23,000. Liquidation expenses of P4,000 were paid, and additional liquidation expenses of P3,200 are withheld to anticipate payment before liquidation is completed. After creditors were paid, partner B received P13,000 on the initial installment. Determine total payment to partners on the initial installment.arrow_forwardThe loan and capital account balances of Hannah, Jean, Jenifer and Kristine Partnership were as follows on October 26, 2020, the date that the partnership began liquidation: Debit Credit Loan, Hannah P20,000 Loan, Jenifer P35,000 Hannah, Capital – 20% 30,000 Jean, Capital – 30% 15,000 Jenifer, Capital – 10% 25,000 Kristine, Capital – 40% 40,000 Required: 1. Prepare a cash priority program. 2. Assume that P20,000 cash is available for the first distribution, determine the cash to be received by the partners. 3. In continuation with the preceding number, another P15,000 cash is available for the next distribution, determine the cash to be received by the partners. Required: Prepare a statement of liquidation with safe payments schedule.arrow_forward
- The net equities and income-sharing ratio for the R, S, T U Partnership before liquidation were as follows: R S T U Net equity in partnership $36,000 $32,400 $8,000 $(100) Income-sharing ratio 3 4 2 1 A) Prepare a program showing how cash should be distributed if the liabilities are $15,000.B) Make the journal entry to distribute $90,000 cash.arrow_forwardA balance sheet for the partnership of A, B, and C, who share profits 2:1:1, shows the following balances just before liquidation: Cash: 48,000 Other Assets: 238,000 Liabilities: 80,000 B, Capital: 62,000 C, Capital: 56,000 On the first month of liquidation, certain non-cash assets were sold resulting to a loss of 23,000. Liquidation expenses of 4,000 were paid, and additionsl liquidation expenses of 3,200 were withheld to anticipate payment before liquidation is completed. After creditors were paid, partner B received 13,000 on the initial installment. Determine the total book value of the non-cash assets on the first month.arrow_forwardA balance sheet for the QRS Partnership, which shares profits and losses in the ratio of 5:3:2 shows the following balances just before liquidation: Cash, P30,000; Other assets, P148,750; Liabilities, P50,000; Q, Capital, P55,000; R, Capital, P38,750; and S Capital, P35,000. On the first month of liquidation, certain assets are sold for P80,000. Liquidation expenses of P2,500 is paid, and additional expenses are anticipated. Liabilities are paid amounting to P13,500, and sufficient cash is retained to ensure payment to creditors before making payment to partners. On the payments to partners, Q receives P15,625. Calculate the amount of cash withheld for anticipated liquidation expenses.arrow_forward
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