Advanced Accounting 14th Edition
14th Edition
ISBN: 9781260726442
Author: By Joe Ben Hoyle And Thomas Schaefer And Timothy Doupnik
Publisher: Mc Grawhill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 15, Problem 7P
To determine
Identify the correct option for finding the amount of cash that each partner receives as a result of the liquidation.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
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…
A, B and C partnership is being liquidated. The current balance sheet is shown here:
Cash
25,000
Other assets
120,000
Accounts payable
A, Capital (30%)
B, Capital (406)
C, Capital (30%)
40,000
31,000
65,000
9,000
Required: Prepare a schedule of partnership liquidation for each of the following independent cases:
a. Non-cash assets are sold for P60,000, and any partner with a deficit is unable to eliminate any of
the deficit.
b. Non-cash assets are sold for P60,000, and any partners with a deficit is able to invest cash equal
to the amount of the deficit.
c. Non-cash assets are sold for P50,000, and any partner with a deficit is able to invest up to
P8,000 cash in the partnership.
A condensed balance sheet for a partnership to be liquidated is as follows:(attached)The profit and loss percentages for Partners A, B, and C are 50%, 30%, and 20%, respectively. For each of the following independent scenarios, determine how much of the available cash, with the exception of $10,000, would be distributed to Partner B.1. Assume that the receivables and the inventory were liquidated for $140,000 cash.2. Assume that all noncash assets other than equipment were sold for $53,000 cash.3. Assume that noncash assets with a book value of $300,000 were sold for $250,000 cash and that a distribution to Partner A was made in order to pay off the loan payable to them.
Chapter 15 Solutions
Advanced Accounting 14th Edition
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
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after Tatum receives a 10,000 salary and Brook receives a 15,000 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $40,000 B. $25,000 C. ($5,000) In addition, show the resulting entries to each partners capital account. Tatums capital account balance is $50,000 and Brooks is $60,000.arrow_forwardThe partnership of Magda and Sue shares profits and losses in a 50:50 ratio after Mary receives a $7,000 salary and Sue receives a $6,500 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $10,000 B. $5,000 C. ($12,000) In addition, show the resulting entries to each partners capital account.arrow_forwardA partnership has the following balance sheet prior to liquidation (partners' profit and loss ratios are in parentheses): $ 33,000 100,000 Cash Other assets Total $ 133,000 Beginning balances Sale of assets Pay liabilites Pay liquidation expenses Subtotal Distribution to partners Ending balances Liabilities Playa, capital (40%) Bahia, capital (30%) Arco, capital (30%) Total During liquidation, other assets are sold for $80,000, liabilities are paid in full, and $15,000 in liquidation expenses are paid. Required: Prepare a statement of partnership liquidation to determine the amount of cash each partner receives as a result of this liquidation. Note: Amounts to be deducted should be entered with a minus sign. PLAYA, BAHIA, AND ARCO PARTNERSHIP Statement of Partnership Liquidation Other Assets Liabilities $ 50,000 24,000 29,000 30,000 $ 133,000 Cash Playa, Capital Bahia, Capital Arco, Capital (40%) (30%) (30%)arrow_forward
- A partnership has the following balance sheet prior to liquidation (partners’ profit and loss ratios are in parentheses): During liquidation, other assets are sold for $80,000, liabilities are paid in full, and $15,000 in liquidation expenses are paid. What amount of cash does each partner receive as a result of this liquidation? Playa, $6,000; Bahia, $4,500; Arco, $4,500. Playa, $10,000; Bahia, $18,500; Arco, $19,500. Playa, $16,000; Bahia, $23,000; Arco, $24,000. Playa, $19,200; Bahia, $14,400; Arco, $14,400.arrow_forwardBefore liquidation, the following is the financial position of the partnership W, X, Y and Z: W, capital 275,000 W, loan 50,000 X, capital 225,000 Y, capital 257,500 Z, capital 342,500 P&L ratio is 4:3:2:1, respectively. 300,000 was received from certain assets are sold and are distributed to partners. What cash amount should Z receive? a. 300,000 b. 0 c. 135,834 d. 166,166arrow_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
- 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 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 the total book value of the non-cash assets on the first month.arrow_forwardThe balance of the DDD partnership, just before liquidation, is as follows: Liabilities & Capital Assets P 30,000 75,000 Cash Liabilities P 36,000 Non-cash Assets Dangayo, capital (50%) Dangpa, capital (30%) Dapyaw, capital (20%) 30,000 24,000 15,000 P 105,000 Total P 105,000 Total The non-cash assets are sold for P 15,000 net of liquidation expenses and the liabilities are paid. How the remaining cash should be distributed to Dangayo, Dangpa and Dapyaw:arrow_forward
- 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 total payment to partners on the initial installment.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: P48,000 Other assets: 238,000 Liabilities: 80,000 A, Capital: 88,000 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 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_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax CollegeCollege Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
What is liquidity?; Author: The Finance Storyteller;https://www.youtube.com/watch?v=XtjS7CfUSsA;License: Standard Youtube License