Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Can someone help me with the following problem? Thanks! Exercise 2 Worksheet: Partnership Liquidation Schedule Edmonds, Beatty, and Elder decided to dissolve their partnership and
Can someone help me with the following problem? Thanks!
Exercise 2 Worksheet: Partnership Liquidation Schedule | |||||||
Edmonds, Beatty, and Elder decided to dissolve their partnership and liquidate the business. The following balance sheet was created at that time showing current account balances: | |||||||
Cash | $96,000 | Liabilities | $70,000 | This cell intentionally left blank. | |||
Noncash assets | $354,000 | Capital Edmonds (60%) | $202,000 | This cell intentionally left blank. | |||
Building and equipment (net) | $200,000 | Capital Beatty (20%) | $56,000 | This cell intentionally left blank. | |||
Capital Elder (20%) | $122,000 | This cell intentionally left blank. | |||||
Total assets | $450,000 | Total Liabilites and Capital | $450,000 | This cell intentionally left blank. | |||
The transactions listed below occurred during liquidation: Safe capital balances were distributed immediately to the partners. $18,000 in liquidation expenses were estimated as a basis for the computation. Noncash assets, with a $160,000 book value, were sold for $96,000. All liabilities were paid. Safe capital balances were once again distributed. $88,000 in remaining noncash assets were sold. $14,000 in liquidation expenses were paid. Cash remaining was distributed to the partners. Business financial records were closed permanently. Allocate income and prepare a partnership liquidation schedule, using a predistribution plan. Use the spaces below to enter your calculations. | |||||||
Edmonds, Beatty, and Elder Schedule of Partnership Liquidation Final Balances | |||||||
Cash | Noncash Assets | Liabilities | Edmonds, Capital (60%) | Beatty, Capital (20%) | Elder, Capital (20%) | ||
Beginning balances | $96,000 | $354,000 | $70,000 | $202,000 | $56,000 | $122,000 | |
Distribution of $8,000 (cash in excess of liabilities and estimated liquidation expenses) in accordance with predistribution plan Schedule 1 | |||||||
Updated balances | |||||||
Noncash assets sold | |||||||
Updated balances | |||||||
All liabilities are paid | |||||||
Updated balances | |||||||
Distribution of $96,000 (cash in excess of liabilities and estimated liquidation expenses) in accordance with predistribution plan Schedule 1 | |||||||
First distribution | |||||||
Next distribution | |||||||
Next distribution | |||||||
Updated balances | |||||||
Noncash assets sold | |||||||
Updated balances | |||||||
Paid liquidation expenses | |||||||
Updated balances | |||||||
Final distribution based on ending capital account balances | |||||||
Ending balance | |||||||
This cell intentionally left blank. | |||||||
Edmonds, Capital | Beatty, Capital | Elder, Capital | This cell intentionally left blank. | ||||
Beginning balances | This cell intentionally left blank. | ||||||
This cell intentionally left blank. | |||||||
Step 1 balances | This cell intentionally left blank. | ||||||
This cell intentionally left blank. | |||||||
Step 2 balances | This cell intentionally left blank. | ||||||
This cell intentionally left blank. | |||||||
Predistribution Plan | |||||||
Schedule 2 | This cell intentionally left blank. | ||||||
Partner | Capital Balance/ Loss Allocation | Maximum Loss That Can Be Absorbed | This cell intentionally left blank. | ||||
Edmonds | This cell intentionally left blank. | ||||||
Beatty | This cell intentionally left blank. | ||||||
Elder | This cell intentionally left blank. | ||||||
This cell intentionally left blank. | |||||||
Schedule 3 | This cell intentionally left blank. | ||||||
Partner | Capital Balance/ Loss Allocation | Maximum Loss That Can Be Absorbed | This cell intentionally left blank. | ||||
Edmonds | This cell intentionally left blank. | ||||||
Elder | This cell intentionally left blank. |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started