hello, I am working on accounting and I am having trouble with liquidation of a partnership. How do you calculate the allocation of gains (losses)?

I have an example here, but I just dont know the steps I have to take in order to get the allocation gains.

2015/12/10 Assignment Print View Score: 5. 15/15 100 Points % Award: 3 ou t of 3.0 0 poin ts Problem 12-5A Liquidation of a partnership LO P4 Kendra, Cogley, and Mei share income and loss in a 3:2:1 ratio. The partners have decided to liquidate their partnership. On the day of liquidation their balance sheet appears as follows. KENDRA, COGLEY, AND MEI Balance Sheet May 31 Liabilities and Equity $ 91,900 Accounts payable 540,600 Kendra, Capital Cogley, Capital Mei, Capital Total assets $ 253,500 75,800 170,550 132,650 ar stu ed d vi y re aC s o ou urc rs e eH w er as o. co m Assets Cash Inventory $ 632,500 Total liabilities and equity $ 632,500 Required: For each of the following scenarios, complete the schedule allocating the gain or loss on the sale of inventory. Prepare journal entries to record the below transactions. (Do not round intermediate calculations. Amounts to be deducted should be entered with a minus sign.) (1) Inventory is sold for $627,600. Step 1) Determination of gain (loss) Proceeds from the sale of inventory Inventory Cost Gain on sale $ 627,600 540,600 $ 87,000 Step 2) Allocation of the gain (loss) to the partners. KENDRA Initial capital balances $ 3/6 Allocation of gains (losses) Capital balances after gains (losses) Transaction (a) 43,500 $ General Journal Cash COGLEY 75,800 119,300 $ 2/6 29,000 $ Debit is 43,500 29,000 Mei, Capital 14,500 147,150 $ 466,000 87,000 253,500 253,500 Kendra, Capital 119,300 Cogley, Capital 199,550 Mei, Capital 147,150 Cash $ 87,000 Cash (d) 379,000 14,500 87,000 Cogley, Capital Accounts payable Total $ Credit Kendra, Capital sh Th (c) 1/6 132,650 540,600 Gain on sale of inventory Gain on sale of inventory 199,550 $ 627,600 Inventory (b) MEI 170,550 466,000 (2) Inventory is sold for $474,600. https://www.coursehero.com/file/12937060/act-chapter-12-3/ http://ezto.mheducation.com/hm.tpx?todo=printviewSingle 1/4 2015/12/10 Assignment Print View Step 1) Determination of gain (loss) Proceeds from the sale of inventory $ 474,600 540,600 Inventory Cost Loss on sale $ (66,000) Step 2) Allocation of the gain (loss) to the partners. KENDRA Initial capital balances $ 3/6 Allocation of gains (losses) Transaction (a) (33,000) $ Capital balances after gains (losses) COGLEY 75,800 $ 2/6 42,800 (22,000) $ General Journal (11,000) $ 121,650 379,000 (66,000) $ 313,000 66,000 540,600 Kendra, Capital 33,000 Cogley, Capital 22,000 Mei, Capital 11,000 66,000 ar stu ed d vi y re aC s o ou urc rs e eH w er as o. co m Loss on sale of inventory Accounts payable 253,500 Cash (d) Total $ Credit Inventory (c) 1/6 132,650 474,600 Loss on sale of inventory (b) $ 148,550 Debit Cash MEI 170,550 253,500 Kendra, Capital 42,800 Cogley, Capital 148,550 Mei, Capital 121,650 Cash 313,000 (3) Inventory is sold for $360,000 and any partners with capital deficits pay in the amount of their deficits. Step 1) Determination of gain (loss) Proceeds from the sale of inventory Inventory Cost Loss on sale $ 360,000 540,600 $ (180,600) Step 2) Allocation of the gain (loss) to the partners. KENDRA Initial capital balances Allocation of gains (losses) $ 3/6 (90,300) $ (14,500) $ 2/6 (60,200) $ MEI 170,550 110,350 $ 1/6 132,650 $ (30,100) $ 102,550 $ Total 379,000 (180,600) 198,400 sh Th is Capital balances after gains (losses) COGLEY 75,800 https://www.coursehero.com/file/12937060/act-chapter-12-3/ http://ezto.mheducation.com/hm.tpx?todo=printviewSingle 2/4 2015/12/10 Assignment Print View Transaction General Journal (a) Debit Credit Cash 360,000 Loss on sale of inventory 180,600 Inventory (b) 540,600 Kendra, Capital 90,300 Cogley, Capital 60,200 Mei, Capital 30,100 Loss on sale of inventory 180,600 Cash (b) 14,500 Kendra, Capital 14,500 Accounts payable (c) 253,500 Cash (d) 253,500 Cogley, Capital 110,350 Mei, Capital 102,550 212,900 ar stu ed d vi y re aC s o ou urc rs e eH w er as o. co m Cash (4) Inventory is sold for $276,000 and the partners have no assets other than those invested in the partnership. Step 1) Determination of gain (loss) Proceeds from the sale of inventory Inventory Cost Loss on sale $ 276,000 540,600 $ (264,600) Step 2) Allocation of the gain (loss) to the partners and distribution of deficit(s) KENDRA Initial capital balances $ 3/6 Allocation of gains (losses) (132,300) Capital balances after gains (losses) 56,500 Capital balances after deficit allocation (a) $ $ General Journal (88,200) 2/3 (37,667) 0 $ Debit Cash 276,000 Loss on sale of inventory 264,600 is Kendra, Capital 132,300 Cogley, Capital 88,200 Mei, Capital 44,100 Loss on sale of inventory Cogley, Capital 37,667 Mei, Capital 18,833 (44,100) 1/3 (18,833) 88,550 $ 69,717 379,000 (264,600) $ 114,400 0 114,400 Credit Accounts payable 56,500 253,500 Cash (d) 1/6 Total $ 264,600 Kendra, Capital (c) 44,683 132,650 540,600 sh Th (b) $ 82,350 Inventory (b) MEI 170,550 2/6 (56,500) Allocation of deficit balance Transaction COGLEY 75,800 253,500 Cogley, Capital 44,683 Mei, Capital 69,717 Cash 114,400 References Expanded table Problem 12-5A Liquidation of a https://www.coursehero.com/file/12937060/act-chapter-12-3/ partnership LO P4 http://ezto.mheducation.com/hm.tpx?todo=printviewSingle Learning Objective: 12-P4 Prepare entries for partnership liquidation. 3/4 Assignment Print View sh Th is ar stu ed d vi y re aC s o ou urc rs e eH w er as o. co m 2015/12/10 https://www.coursehero.com/file/12937060/act-chapter-12-3/ http://ezto.mheducation.com/hm.tpx?todo=printviewSingle Powered by TCPDF (www.tcpdf.org) 4/4