Kendra, Cogley, and Mei share income and loss in a

$3$

:

$2$

:

$1$

$$ratio

$($

in ratio form: Kendra,

$3$

$/$

$6$

; Cogley,

$2$

$/$

$6$

; and Mei,

$1$

$/$

$6$

$)$

$.$

$$The partners have decided to liquidate their partnership. On the day of liquidation, their balance sheet appears as follows.

Balance Sheet

Assets Liabilities

Cash $

$1$

$8$

$0$

$,$

$8$

$0$

$0$

$$Accounts payable $

$2$

$4$

$5$

$,$

$5$

$0$

$0$

Inventory

$5$

$3$

$7$

$,$

$2$

$0$

$0$

$$Equity

$$ Kendra, Capital

$9$

$3$

$,$

$0$

$0$

$0$

$$ Cogley, Capital

$2$

$1$

$2$

$,$

$5$

$0$

$0$

$$ Mei, Capital

$1$

$6$

$7$

$,$

$0$

$0$

$0$

Total assets $

$7$

$1$

$8$

$,$

$0$

$0$

$0$

$$Total liabilities and equity $

$7$

$1$

$8$

$,$

$0$

$0$

$0$

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.

Note: Do not round intermediate calculations. Enter losses and partner deficits, if any, as negative amounts.

Inventory is sold for $

$6$

$0$

$0$

$,$

$0$

$0$

$0$

$.$

Inventory is sold for $

$5$

$0$

$0$

$,$

$0$

$0$

$0$

$.$

Inventory is sold for $

$3$

$2$

$0$

$,$

$0$

$0$

$0$

$$and partners with deficits pay their deficits in cash.

Inventory is sold for $

$2$

$5$

$0$

$,$

$0$

$0$

$0$

$$and partners with deficits do not pay their deficits.Complete the schedule allocating the gain or loss on the sale of inventory is $

$5$

$0$

$0$

$,$

$0$

$0$

$0$

$.$

Step

$1$

$)$

$$Determination of Gain

$($

Loss

$)$

Proceeds from the sale of inventory $

$5$

$0$

$0$

$,$

$0$

$0$

$0$

$$

Inventory cost

Step

$2$

$)$

$$Allocation of the Gain

$($

Loss

$)$

$$to the Partners.

KENDRA COGLEY MEI Total

Initial capital balances $

$9$

$3$

$,$

$0$

$0$

$0$

$$ $

$2$

$1$

$2$

$,$

$5$

$0$

$0$

$$ $

$1$

$6$

$7$

$,$

$0$

$0$

$0$

$$$

$4$

$7$

$2$

$,$

$5$

$0$

$0$

Allocation of gains

$($

losses

$)$

$0$

Capital balances after gains

$($

losses

$)$

$$ $

$9$

$3$

$,$

$0$

$0$

$0$

$$ $

$2$

$1$

$2$

$,$

$5$

$0$

$0$

$$ $

$1$

$6$

$7$

$,$

$0$

$0$

$0$

$$$

$4$

$7$

$2$

$,$

$5$

$0$

$0$

$$ Prepare journal entries to record the inventory is sold for $

$5$

$0$

$0$

$,$

$0$

$0$

$0$

$.$

$$ Complete the schedule allocating the gain or loss on the sale of inventory is $

$3$

$2$

$0$

$,$

$0$

$0$

$0$

$$and partners with deficits pay their deficits in cash. Prepare journal entries to record the inventory is sold for $

$3$

$2$

$0$

$,$

$0$

$0$

$0$

$$and partners with deficits pay their deficits in cash. Complete the schedule allocating the gain or loss on the sale of inventory $

$2$

$5$

$0$

$,$

$0$

$0$

$0$

$$and partners with deficits do not pay their deficits. Prepare journal entries to record the inventory is sold for $

$2$

$5$

$0$

$,$

$0$

$0$

$0$

$$and partners with deficits do not pay their deficits.