Question
I did part A and I'm struggling with the journal entries in part B. I'll include pictures of what I've done at the end. Part
I did part A and I'm struggling with the journal entries in part B. I'll include pictures of what I've done at the end.
Part A
The partnership of Wingler, Norris, Rodgers, and Guthrie was formed several years ago as a local architectural firm. Several partners have recently undergone personal financial problems and have decided to terminate operations and liquidate the business. The following balance sheet is drawn up as a guideline for this process:
Cash | $ | 65,000 | Liabilities | $ | 54,000 |
Accounts receivable | 132,000 | Rodgers, loan | 85,000 | ||
Inventory | 151,000 | Wingler, capital (30%) | 195,000 | ||
Land | 110,000 | Norris, capital (10%) | 138,000 | ||
Building and equipment (net) | 193,000 | Rodgers, capital (20%) | 99,000 | ||
Guthrie, capital (40%) | 80,000 | ||||
Total assets | $ | 651,000 | Total liabilities and capital | $ | 651,000 |
When the liquidation commenced, liquidation expenses of $20,000 were anticipated as being necessary to dispose of all property.
Prepare a predistribution plan for this partnership.
Part B
The following transactions transpire during the liquidation of the Wingler, Norris, Rodgers, and Guthrie partnership:
- Collected 90 percent of the total accounts receivable with the rest judged to be uncollectible.
- Sold the land, building, and equipment for $175,000.
- Made safe capital distributions.
- Learned that Guthrie, who has become personally insolvent, will make no further contributions.
- Paid all liabilities.
- Sold all inventory for $96,000.
- Made safe capital distributions again.
- Paid actual liquidation expenses of $14,000 only.
- Made final cash disbursements to the partners based on the assumption that all partners other than Guthrie are personally solvent.
Prepare journal entries to record these liquidation transactions.
Required A Required B Prepare a predistribution plan for this partnership. (Do not round interm Wingler, Capital Guthrie, Capital Norris, Capital S 138,000 (20,000) $ 118,000 (45,000) $ 195,000 (60,000) $ 135,000 (135,000) $ 80,000 (80,000) Rodgers, Loan and Capital $ 184,000 (40,000) $ 144,000 (90,000) $ 54,000 Beginning balances Loss Step one balances Loss Step two balances Loss Step three balances S 0 0 S 0 $ 73,000 $ 0 0 (54,000) 0 (27,000) $ 46,000 IS 0 $ 0 S 0 Required A Required B No 1 Prepare journal entries to record these liquidation transactions. (Do not round intermediate calculations. Round the f answers to nearest dollar amounts. If no entry is required for a particular transaction/event, select "No journal entry in the first account field.) Transaction General Journal Debit Credit 01 Cash 118,800 Wingler, Capital 3,960 Norris, Capital 1,320 Rodgers, Capital 2.640 Guthrie, Capital 5,280 Accounts receivable 132,000 02 N Cash Wingler, Capital Norris, Capital Rodgers, Capital Guthrie, Capital Land Building and equipment 175,000 38,400 12,800 25,600 51,200 110,000 193,000 03 51,000 17,000 Wingler, Capital Norris, Capital Rodgers, Loan Rodgers, Capital Cash 34,000 157,800 4 04 No journal entry required 5 05 Liabilities 54,000 Cash 54,000 6 06 Cash Wingler, Capital Norris, Capital Rodgers, Capital Guthrie, Capital Inventory 96,000 16,500 5,500 11,000 22,000 151,000 7 07 Wingler, Capital Norris, Capital Rodgers, Capital Cash lololo 96,000 8 08 Wingler, Capital Norris, Capital Rodgers, Capital Guthrie, Capital Cash olololo 9 9.a Wingler, Capital Norris, Capital Rodgers, Capital Guthrie, Capital 10 9.b Wingler, Capital Norris, Capital Rodgers, Capital Cash >>
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