Accounting HW

Cash	$ 48,000		Liabilities	$ 38,000
Land	170,000		Adams, capital	106,000
Building	160,000		Baker, capital	42,000
			Carvil, capital	76,000
			Dobbs, capital	116,000
Total assets	$378,000		Total liabilities and capital	$378,000

To avoid more conflict, the partners have decided to cease operations and sell all assets. Using this information, answer the following questions. Each question should be viewed as an independent situation related to the partnership?s liquidation.

a.	The $10,000 cash that exceeds the partnership liabilities is to be disbursed immediately. If profits and losses are allocated to Adams, Baker, Carvil, and Dobbs on a 2:3:3:2 basis, respectively, how will the $10,000 be divided?

b.	The $10,000 cash that exceeds the partnership liabilities is to be disbursed immediately. If profits and losses are allocated on a 2:2:3:3 basis, respectively, how will the $10,000 be divided?

c.

The building is immediately sold for $90,000 to give total cash of $138,000. The liabilities are then paid, leaving a cash balance of $100,000. This cash is to be distributed to the partners. How much of this money will each partner receive if profits and losses are allocated to Adams, Baker, Carvil, and Dobbs on a 1:3:3:3 basis, respectively? (Do not round intermediate calculations.)

d.	Assume that profits and losses are allocated to Adams, Baker, Carvil, and Dobbs on a 1:3:4:2 basis, respectively. How much money must the firm receive from selling the land and building to ensure that Carvil receives a portion? (Do not round intermediate calculations.)

Cash Land Building Total assets $ 48,000 170,000 160,000 $378,000 Liabilities Adams, capital Baker, capital Carvil, capital Dobbs, capital Total liabilities and capital $ 38,000 106,000 42,000 76,000 116,000 $378,000 To avoid more conflict, the partners have decided to cease operations and sell all assets. Using this information, answer the following questions. Each question should be viewed as an independent situation related to the partnership's liquidation. a. The $10,000 cash that exceeds the partnership liabilities is to be disbursed immediately. If profits and losses are allocated to Adams, Baker, Carvil, and Dobbs on a 2:3:3:2 basis, respectively, how will the $10,000 be divided? b. The $10,000 cash that exceeds the partnership liabilities is to be disbursed immediately. If profits and losses are allocated on a 2:2:3:3 basis, respectively, how will the $10,000 be divided? c. The building is immediately sold for $90,000 to give total cash of $138,000. The liabilities are then paid, leaving a cash balance of $100,000. This cash is to be distributed to the partners. How much of this money will each partner receive if profits and losses are allocated to Adams, Baker, Carvil, and Dobbs on a 1:3:3:3 basis, respectively? (Do not round intermediate calculations.) d. Assume that profits and losses are allocated to Adams, Baker, Carvil, and Dobbs on a 1:3:4:2 basis, respectively. How much money must the firm receive from selling the land and building to ensure that Carvil receives a portion? (Do not round intermediate calculations.) Fred and George have been in partnership for many years. The partners, who share profits and losses on a 60:40 basis, respectively, wish to retire and have agreed to liquidate the business. Liquidation expenses are estimated to be $10,000. At the date the partnership ceases operations, the balance sheet is as follows: Cash Noncash assets Total assets $ $ 100,000 Liabilities Fred, 200,000 capital George, capital Total 300,000 liabilities and capital $ 80,000 100,000 120,000 $ 300,000 1. Prepare journal entries for the following transactions: (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) a. b. c. d. e. f. g. Distributed safe cash payments to the partners. Paid $40,000 of the partnership's liabilities. Sold noncash assets for $220,000. Distributed safe cash payments to the partners. Paid all remaining partnership liabilities of $40,000. Paid $8,000 in liquidation expenses; no further expenses will be incurred. Distributed remaining cash held by the business to the partners. Prepare a final statement of partnership liquidation. (Enter all account balances (including updated balances) as positive amounts. Enter deductions and negative balances with a minus sign.)