Part A
The partnership of Wingler, Norris, Rodgers, and Guthrie was formed several years ago as a local architectural firm. Several partners have recently undergone personal financial problems and have decided to terminate operations and liquidate the business. The following balance sheet is drawn up as a guideline for this process:
Cash | $ | 53,000 | Liabilities | $ | 60,000 |
Accounts receivable | 120,000 | Rodgers, loan | 73,000 | ||
Inventory | 139,000 | Wingler, capital (30%) | 177,000 | ||
Land | 104,000 | Norris, capital (10%) | 126,000 | ||
Building and equipment (net) | 187,000 | Rodgers, capital (20%) | 93,000 | ||
Guthrie, capital (40%) | 74,000 | ||||
Total assets | $ | 603,000 | Total liabilities and capital | $ | 603,000 |
When the liquidation commenced, liquidation expenses of $20,000 were anticipated as being necessary to dispose of all property.
Prepare a predistribution plan for this partnership.
Part B
The following transactions transpire during the liquidation of the Wingler, Norris, Rodgers, and Guthrie partnership:
Prepare journal entries to record these liquidation transactions.
1. Realisation A/c Dr $102000
To accounts receivable A/c $ 102000
2. Realisation A/c Dr $169000
To land, building,and equipment A/c $169000
loss occured due to sale of land, building and equipment is
value of land, building and equipment as per books is ($104000+$187000) =$291000
sale value of land, building and equipment is$169000
loss on sale of land, building and equipment is $291000-$169000=$122000
loss should be taken by patners as per their capital ratio i.e 3:1:2:4 for Wingler, Norris, Rodgers, and Guthrie
3. Realisation A/c Dr $90000
To inventory A/c $90000
loss on sale of inventory is $139000-$90000=$49000
this loss also should has to be taken by the partners as per their capital ratio 3:1:2:4 for Wingler, Norris, Rodgers, and Guthrie
liquidation expenses has to be bare by the partners only
Part A The partnership of Wingler, Norris, Rodgers, and Guthrie was formed several years ago as...
Part A The partnership of Wingler, Norris, Rodgers, and Guthrie was formed several years ago as a local architectural firm. Several partners have recently undergone personal financial problems and have decided to terminate operations and liquidate the business. The following balance sheet is drawn up as a guideline for this process: Cash $ 59,000 Liabilities $ 57,000 Accounts receivable 126,000 Rodgers, loan 79,000 Inventory 145,000 Wingler, capital (30%) 186,000 Land 107,000 Norris, capital (10%) 132,000 Building and equipment (net) 190,000...
The partnership of Wingler, Norris, Rodgers, and Guthrie was formed several years ago as a local architectural firm. Several partners have recently undergone personal financial problems and have decided to terminate operations and liquidate the business. The following balance sheet is drawn up as a guideline for this process: Cash $ 49,000 Liabilities $ 62,000 Accounts receivable 116,000 Rodgers, loan 69,000 Inventory 135,000 Wingler, capital (30%) 171,000 Land 102,000 Norris, capital (10%) 122,000 Building and equipment (net) 185,000 Rodgers, capital...
The partnership of Larson, Norris, Spencer, and Harrison has decided to terminate operation 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 $47,000 Accounts receivable 44,000 Larson, capital (20%) 15,000 Inventory 39,000 Norris, capital...
Hardin, Sutton, and Williams have operated a local business as a partnership for several years. All profits and losses have been allocated in a 3:2:1 ratio, respectively. Recently, Williams has undergone personal financial problems, and is insolvent. To satisfy Williams' creditors, the partnership has decided to liquidate. The following balance sheet has been produced: 20 Points) 4 Cash Noncash assets 10,000 227,000 Liabilities Hardin, capital Sutton, capital Williams, capital Total liabilities and capital $ 80,000 96,000 45,000 16.000 S 237000...
Required information [The following information applies to the questions displayed below.] The partnership of Butler, Osman, and Ward was formed several years ago as a local tax preparation firm. Two partners have reached retirement age, and the partners have decided to terminate operations and liquidate the business. Liquidation expenses of $49,000 are expected. The partnership balance sheet at the start of liquidation is as follows: Cash Accounts receivable Office equipment (net) Building (net) Land Total assets $ 45,000 75,000 65,000...
Required Information [The following information applies to the questions displayed below.] The partnership of Butler, Osman, and Ward was formed several years ago as a local tax preparation firm. Two partners have reached retirement age, and the partners have decided to terminate operations and liquidate the business. Liquidation expenses of $43,000 are expected. The partnership balance sheet at the start of liquidation is as follows: Cash Accounts receivable Office equipment (net) Building (net) Land $ 39, eee 69,689 59, eee...
The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its business property. A balance sheet drawn up at this time shows the following account balances: Cash $ 69,000 Liabilities $ 40,000 Noncash assets 285,000 Frick, capital (60%) 171,000 Wilson, capital (20%) 46,000 Clarke, capital (20%) 97,000 Total assets $ 354,000 Total liabilities and capital $ 354,000 Part A Prepare a predistribution plan for this partnership Part B The following transactions occur in liquidating this...
The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its business property. A balance sheet drawn up at this time shows the following account balances: Cash $ 71,000 Liabilities $ 39,000 Noncash assets 291,000 Frick, capital (60%) 177,000 Wilson, capital (20%) 47,000 Clarke, capital (20%) 99,000 Total assets $ 362,000 Total liabilities and capital $ 362,000 Part A Prepare a predistribution plan for this partnership Part B The following transactions occur in liquidating this...
The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its business property. A balance sheet drawn up at this time shows the following account balances: Cash $ 66,000 Liabilities $ 43,000 Noncash assets 243,000 Frick, capital (60%) 144,000 Wilson, capital (20%) 39,000 Clarke, capital (20%) 83,000 Total assets $ 309,000 Total liabilities and capital $ 309,000 Part A Prepare a predistribution plan for this partnership Part B The following transactions occur in liquidating this...
The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its business property. A balance sheet drawn up at this time shows the following account balances: Cash $ 64,000 Liabilities $ 38,000 Noncash assets 261,000 Frick, capital (60%) 156,000 Wilson, capital (20%) 42,000 Clarke, capital (20%) 89,000 Total assets $ 325,000 Total liabilities and capital $ 325,000 Part A Prepare a predistribution plan for this partnership Part B The following transactions occur in liquidating this...