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If you can help fill in what's missing and explain gow to do it. Thank you! After working for in the Kitchen remodeling business for
If you can help fill in what's missing and explain gow to do it.
After working for in the Kitchen remodeling business for several years. Terry and Phyllis decided to go into business for themselves and formed the Kitchens Just for You partnership. Three years ago, they admitted Connie as a partner and recognized goodwill at that time because of her good client list for planned kitchen makeovers. However, they were not able to gain a sufficient market for new customers and on September 1, 20X9, they agreed to dissolve and liquidate the business. They decided on an installment liquidation to complete the projects already initiated. The balance sheet, with profit and loss-sharing percentages at the beginning of liquidation, is as follows: Assets Cash Receivables Terry, Loan Inventory Goodwill Total Assets KITCHENS JUST FOR YOU Balance Sheet September 1, 2009 Liabilities and Equities $ 22,000 Accounts Payable 54,000 Connie, Loan 9,000 Terry, Capital (30%) 52,000 Phyllis, Capital (505) 30,000 Connie, Capital (208) $167.000 Total Liabilities & Equities $ 43,000 16,000 13,000 38,000 57.000 5167,000 Connie's loan was for working capital, the loan to Terry was for his unexpected personal medical bills During September 20X9, the first month of liquidation, the partnership collected $32,000 in receivables and decided to write off $10,000 of the remaining recelvables Sales of one-half of the book value of the inventory realized a loss of $5,000 The partners estimate that the costs of liquidating the business (newspaper ads, signs, etc) are expected to be $7000 for the remainder of the liquidation process Required: Prepare a schedule of safe payments to partners as of September 30, 20X9, to show how the available cash should be distributed to the partners. Please follow the practical guidelines when completing this worksheet KITCHENS JUST FOR YOU Schedule of Safe Payments to Partners Terry Phyllis Connie Capital balances, September 1, 20X9 $ 13.000 $ 38.000 $ 57 000 Loans to (from) partner (9.000) 0 16.000 Total $ 4,000 $ 38,000 $ 73.000 Write-off of goodwill 9.000 150001 6.000 Write-off of receivables 3000 2.000 Loss on sale of inventory 1.500 2.500 1.000 Capital balances, September 30, 20X9 $ 19.500 5 15.500 5 64.000 Possible loss for remaining receivables and Inventory Possible liquidation costs Balances 5 (9.500) 15 500 5 64 000 Distribute any potential deficits 5 (9.500 5 15.500 5 64.000 Safe payments to partners September 30, 20X9 435.000 Thank you!
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