Question
Exercise 12-8 Sedgwick Company at December 31 has cash $24,000, noncash assets $105,000, liabilities $50,200, and the following capital balances: Floyd $43,200and DeWitt $35,600. The
Exercise 12-8
Sedgwick Company at December 31 has cash $24,000, noncash assets $105,000, liabilities $50,200, and the following capital balances: Floyd $43,200and DeWitt $35,600. The firm is liquidated, and $117,000in cash is received for the noncash assets. Floyd and DeWitt income ratios are60% and40%, respectively.
SEDGWICK COMPANY
Item
Cash
+Non cash Assets
=Liabilities
+Floyd, Capital
+DeWitt, Capital
Balances before liquidation$24,000
$105,000
$50,200
$43,200
$35,600
Sale of non cash assets and allocation of gain
New balances
Pay liabilities
New balances
Cash distribution to partners
Final balances
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Management Accounting
Authors: Anthony A Atkinson, Robert S Kaplan
5th Edition
136005314, 978-0136005315
