Statement of Partnership Liquidation After the accounts are closed on April 10, prior to liquidating the...

Question

Question

Statement of Partnership Liquidation After the accounts are closed on April 10, prior to liquidating the partnership, the cap

Fairchild, Lowes, and Howard Statement of Partnership Liquidation For Period April 10-30 Fairchild, Capital Assets Liabilitie

W ABAN 2. Assume the partner with the capital deficiency declares bankruptcy and is unable to pay the deficiency a. Joumalize

business accounting

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

Partnership

A partnership is a formal arrangement by two or more parties to manage and operate a business and share its profits. It is that form of organization which is owned and managed by two or more persons who invest and share the profits and losses according to a pre-determined ratio.

Liquidating Partnership

The winding up of process of partnership is called liquidation of partnership. At the time of liquidation of partnership, loss on realization or gain on realization is determined and distributed between the partners in their profit sharing ratio.

Fairchild, Lowes and Howard

Statement of Partnership Liquidation

for period April 10 - 30

	Cash +	Non cash Assets	= Liabilities	+Fairchild Capital (1/4)	+Lowes Capital(1/4)	+Howard Capital (2/4)
Balances before realization	$9,600	$76,700	$10,000	$38,200	$6,900	$31,200
Sale of assets and division of loss	+ $40,700	-$76,700	-	-$ 9,000	- $9,000	-$18,000
Balances after realization	$50,300	-	$10,000	$29,200	($2,100)	$13,200
Payment of liabilities	-$10,000	-	-$10,000	-	-	-
Balances after payment of liabilities	$40,300	-	-	$29,200	($2,100)	$13,200
Receipt of deficiency	$2,100	-	-	-	$2,100	-
Balances	$42,400	-	-	$29,200	-	$13,200
Cash distributed to partners	-$42,400	-	-	-$29,200	-	-$13,200
Final balances	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0

2.a ACCOUNT DEBIT CREDIT

Fairchild, Capital	$700
Howard Capital	$1,400
Lowes, Capital		$2,100

Deficiency of $2,100 of Lowes would be divided between the other partners Fairchild and Howard in their profit sharing ratio of 1:2 respectively. Therefore, Fairchild will absorb 1/3 of $2,100 deficiecny i.e, $700 and Howardwill absorb 2/3 of the deficiency i.e., $1,400.

2.b ACCOUNT DEBIT CREDIT

Fairchild, Capital	$28,500
Howard Capital	$11,800
Lowes, Capital		$40,300

W.N.1 Calculation of division of realization loss among partners

Distribution of Realization loss in profit-sharing ratio:

Book Value of Non-cash asset $76,700

Less:Realized price of non-cash asset $40,700

Realization Loss $36,000

Fairchild = $36,000*1/4 = $9,000

Lowes = $36,000*1/4 = $9,000

Howard = $36,000*2/4 = $18,000

Total $36,000

Add a comment

Answer 2

Similar Homework Help Questions

Statement of Partnership Liquidation After the accounts are closed on April 10, prior to liquidating the...

Statement of Partnership Liquidation After the accounts are closed on April 10, prior to liquidating the partnership, the capital accounts of Zach Fairchild, Austin Lowes, and Amber Howard are $39,100, $6,900, and $30,300, respectively. Cash and noncash assets total $10,000 and $76,700, respectively. Amounts owed to creditors total $10,400. The partners share income and losses in the ratio of 1:1:2. Between April 10 and April 30, the noncash assets are sold for $40,700, the partner with the capital deficiency pays...
Statement of Partnership Liquidation After the accounts are closed on April 10, prior to liquidating the...

Statement of Partnership Liquidation After the accounts are closed on April 10, prior to liquidating the partnership, the capital accounts of Zach Fairchild, Austin Lowes, and Amber Howard are $38,200, $6,900, and $31,200, respectively. Cash and noncash assets total $9,600 and $76,700, respectively. Amounts owed to creditors total $10,000. The partners share income and losses in the ratio of 1:1:2. Between April 10 and April 30, the noncash assets are sold for $40,700, the partner with the capital deficiency pays...
Statement of Partnership Liquidation After the accounts are closed on April 10, prior to liquidating the...

Statement of Partnership Liquidation After the accounts are closed on April 10, prior to liquidating the partnership, the capital accounts of Zach Fairchild, Austin Lowes, and Amber Howard are $38,200, $6,900, and $31,200, respectively. Cash and noncash assets total $9,600 and $76,700, respectively. Amounts owed to creditors total $10,000. The partners share income and losses in the ratio of 1:1:2. Between April 10 and April 30, the noncash assets are sold for $40,700, the partner with the capital deficiency pays...

Statement of Partnership Liquidation After closing the accounts on July 1, prior to liquidating the partnership,...

Statement of Partnership Liquidation After closing the accounts on July 1, prior to liquidating the partnership, the capital account balances of Gold, Porter, and Sims are $36,600, $52,200, and $23,100, respectively. Cash, noncash assets, and liabilities total $55,200, $96,600, and $39,900, respectively. Between July 1 and July 29, the noncash assets are sold for $77,400, the liabilities are paid, and the remaining cash is distributed to the partners. The partners share net income and loss in the ratio of 3:2:1....
After the accounts are closed on February 3, prior to liquidating the partnership, the capital accounts...

After the accounts are closed on February 3, prior to liquidating the partnership, the capital accounts of William Gerloff, Joshua Chu, and Courtney Jewett are $19,140, $4,700, and $21,860, respectively. Cash and noncash assets total $5,660 and $54,780, respectively. Amounts owed to creditors total $14,740. The partners share income and losses in the ratio of 2:1:1. Between February 3 and February 28, the noncash assets are sold for $33,580, the partner with the capital deficiency pays the deficiency to the...
Statement of Partnership Liquidation After closing the accounts on July 1, prior to liquidating the partnership,...

Statement of Partnership Liquidation After closing the accounts on July 1, prior to liquidating the partnership, the capital account balances of Gold, Porter, and Sims are $30,300, $43,200, and $19,200, respectively. Cash, noncash assets, and liabilities total $50,100, $80,100, and $37,500, respectively. Between July 1 and July 29, the noncash assets are sold for $63,900, the liabilities are paid, and the remaining cash is distributed to the partners. The partners share net income and loss in the ratio of 3:2:1....

Statement of Partnership Liquidation After closing the accounts on July 1, prior to liquidating the partnership,...

Statement of Partnership Liquidation After closing the accounts on July 1, prior to liquidating the partnership, the capital account balances of Gold, Porter, and Sims are $36,300, $51,600, and $23,100, respectively. Cash, noncash assets, and liabilities total $59,100, $95,700, and $43,800, respectively. Between July 1 and July 29, the noncash assets are sold for $76,500, the liabilities are paid, and the remaining cash is distributed to the partners. The partners share net income and loss in the ratio of 3:2:1....
Statement of Partnership Liquidation After closing the accounts on July 1, prior to liquidating the partnership,...

Statement of Partnership Liquidation After closing the accounts on July 1, prior to liquidating the partnership, the capital account balances of Gold, Porter, and Sims are $39,600, $56,100, and $24,900, respectively. Cash, noncash assets, and liabilities total $59,400, $104,100, and $42,900, respectively. Between July 1 and July 29, the noncash assets are sold for $83,100, the liabilities are paid, and the remaining cash is distributed to the partners. The partners share net income and loss in the ratio of 3:2:1....
Statement of Partnership Liquidation After closing the accounts on July 1, prior to liquidating the partnership,...

Statement of Partnership Liquidation After closing the accounts on July 1, prior to liquidating the partnership, the capital account balances of Gold, Porter, and Sims are $23,700, $33,600, and $15,000, respectively. Cash, noncash assets, and liabilities total $36,000, $62,400, and $26,100, respectively. Between July 1 and July 29, the noncash assets are sold for $49,800, the liabilities are paid, and the remaining cash is distributed to the partners. The partners share net income and loss in the ratio of 3:2:1....

Statement of Partnership Liquidation After closing the accounts on July 1, prior to liquidating the partnership,...

Statement of Partnership Liquidation After closing the accounts on July 1, prior to liquidating the partnership, the capital account balances of Gold, Porter, and Sims are $36,000, $51,000, and $22,800, respectively. Cash, noncash assets, and liabilities total $57,300, $94,500, and $42,000, respectively. Between July 1 and July 29, the noncash assets are sold for $75,300, the liabilities are paid, and the remaining cash is distributed to the partners. The partners share net income and loss in the ratio of 3:2:1....

Statement of Partnership Liquidation After the accounts are closed on April 10, prior to liquidating the...

Homework Answers

Add Answer to:
Statement of Partnership Liquidation After the accounts are closed on April 10, prior to liquidating the...

Post as a guest

Earn Coins