Assignment Choice #2: Partnership Transactions

Using the data in the Option 2 Spreadsheet (linked at the bottom of the page), perform the accounting required for the formation, operations, and liquidation of the SPLIT Partnership. Within the worksheet, you are to:

1. Perform the required journal entries
2. Update the partnership financials after each set of transactions. There are three sets?formation set, operation set, and liquidation set.

Complete all work on the spreadsheet attached to this assignment; it will be your only deliverable.

Part 1: Perform for all partnership formation transactions

Part 2: Perform for all operational and liquidation transactions

Make sure to label your answers and provide support where needed. Your responses should be complete, well written, and in conformity with APA Requirements.

Fair Value of Items Contributed to Partnership (FMV=Basis) on March 1, 2014 Assets, Liabilities & Equities Cash AR Inventory Land Furniture Less: Accumulated Depreciation Computer Less: Accumulated Depreciation Building Total Assets AP Loan-L S $10,000 $15,000 P $25,000 a) L $25,000 I $25,000 $15,000 $15,000 T $25,000 $10,000 $15,000 $50,000 $90,000 $0 $0 Use the information to the left to journalize the formation of the partnership. Prepare the beginning partnership balance sheet using the template to the right Account DR CR $50,000 $0 $0 $60,000 $30,000 $5,000 $85,000 $0 $0 $55,000 $0 $5,000 $45,000 $15,000 $0 b) Assume it is now December 31, 2014. Adjust for depreciation for the furniture (7 year life), computer (3 year life) and building (40 year life). Account c) DR CR In addition to the depreciation expenses there are $10,000 of operations expenses all paid in cash. There was also operational revenue of $20,000 (also paid in cash). Prepare the partnership balance sheet as of December 31, 2014 also given the effects of transactions in a) and b). Income Statement for SPLIT for the Year Ended December 31, 2014 Operational Revenue Depreciation Expense*** Other Operational Expenses Net Income *** Use amount from adjusting entry and calculate net income $20,000 $10,000 Balance Sheet for SPLIT as of March 1, 2014 Assets Cash AR Inventory Land Furniture Less: Accumulated Depreciation Computer Less: Accumulated Depreciation Building Total Assets Liabilities AP Loan-L Equity Capital-S Capital-P Capital-L Capital-I Capital-T Total Equity and Liabilities Balance Sheet for SPLIT as of December 31, 2014 Assets Cash AR Inventory Land Furniture Less: Accumulated Depreciation Computer Less: Accumulated Depreciation Building Less: Accumulated Depreciation Total Assets Liabilities AP Loan-L Equity Capital-S Capital-P Capital-L Capital-I Capital-T Total Equity and Liabilities Statement of Liquidation for SPLIT Assets Cash Noncash A Accounts Payable Partners Capital Liabilities Notes Payable Loan S P L Realization and allocation Subtotals Distributions Outside Creditors Partner Loans Partners Capital Post Liquidation Balances ** Fixed assets each sold for 20% above ending book value, Inventory sold for 10% below ending book value and all other fair values were equal to book value. I T