Question
Following is a series of independent cases . In each situation, indicate the cash distribution to be made to partners at the end of the
Following is a series of independent cases. In each situation, indicate the cash distribution to be made to partners at the end of the liquidation process. Unless otherwise stated, assume that all solvent partners will reimburse the partnership for their deficit capital balances.
Part A-The Buarque, Monte, and Vinicius partnership reports the following accounts. Vinicius is personally insolvent and can contribute only an additional $27,000 to the partnership.
Cash | $ | 148,000 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities |
| 53,000 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||
Monte, loan |
| 56,000 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||
Buarque, capital (50% of profits and losses) |
| 36,000 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||
Monte, capital (25%) |
| 36,000 |
|
| |||||||||||||||||||||||||||||||||||||||||||||||||
Vinicius, capital (25%) |
| (33,000 | ) (deficit) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Part B- Drawdy, Langston, and Pearl operate a local accounting firm as a partnership. After working together for several years, they have decided to liquidate the partnerships property. The partners have prepared the following balance sheet:
|
|
Part C-Drawdy, Langston, and Pearl operate a local accounting firm as a partnership. After working together for several years, they have decided to liquidate the partnerships property. The partners have prepared the following balance sheet:
Cash | $ | 38,000 |
| Liabilities | $ | 44,000 |
Drawdy, loan |
| 23,000 |
| Langston, loan |
| 31,000 |
Noncash assets |
| 186,000 |
| Drawdy, capital |
| 83,000 |
|
|
|
| Langston, capital |
| 68,000 |
|
|
|
| Pearl, capital |
| 21,000 |
Total assets | $ | 247,000 |
| Total liabilities and capital | $ | 247,000 |
The firm sells the noncash assets for $138,000; it will use $24,000 of this amount to pay liquidation expenses. All three of these partners are personally insolvent. Assume that the profits and losses are split 2:4:4 to Drawdy, Langston, and Pearl, respectively.
Part D-Following the liquidation of all noncash assets, the partnership of Krups, Lindau, Riedel, and Schnee has the following account balances. Krups is personally insolvent.
Liabilities | $ | 9,000 |
|
Krups, loan |
| 24,000 |
|
Krups, capital (30% of profits and losses) |
| (56,000 | ) deficit |
Lindau, capital (30%) |
| (48,000 | ) deficit |
Riedel capital (20%) |
| 33,000 |
|
Schnee, capital (20%) |
| 38,000 |
|
Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Indicate the cash distribution to be made to partners at the end of the liquidation pr that all solvent partners will reimburse the partnership for their deficit capital balanc Buarque, Monte, Loan and Capital Vinicius, Capital Capital $ 36,000 $ 0 Beginning balances Contribution by Vinicius Capital balances Elimination of Vinicius's deficit Final distribution 36,000 0 36,000 $ (33,000) 27,000 $ 6,000) $ 36,000 $ $ 36,000 $ 36,000 $ (6,000) Required A Required B Required C Required D Indicate the cash distribution to be made to partners at the end of the liquidatic that all solvent partners will reimburse the partnership for their deficit capital ba calculations. Round the final answer to nearest dollar amounts.) Drawdy, Langston, Loan and Loan and Capital Capital Pearl, Capital cap Beginning balances Loss on disposal Liquidation expenses Capital balances Allocation of Pearl's deficit Final distribution $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Required A Required B Required C Required D Indicate the cash distribution to be made to partners at the end of the liquidatic that all solvent partners will reimburse the partnership for their deficit capital ba calculations. Round the final answer to nearest dollar amounts.) Drawdy, Loan and Capital Langston, Loan and Capital Pearl, Capital Beginning balances Loss on disposal Liquidation expenses Capital balances Allocation of Pearl's deficit balance Final distribution $ 0 $ 0 0 $ 0 $ 0 $ 0 Required A Required B Required C Required D Indicate the cash distribution to be made to partners at the end of the liquidation process. Unless otherw that all solvent partners will reimburse the partnership for their deficit capital balances. (Do not round in calculations. Round the final answer to nearest dollar amounts.) Krups, Loan and Lindau, Capital Riedel, Capital Schnee, Capital Beginning balances Allocation of Krups's deficit balance Capital balances Contribution by Lindau Final distribution $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $
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