Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On January 1, the partners of Van, Bakel, and Cox (who share profits and losses in the ratio of 5:3:2, respectively) decide to terminate operations

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

On January 1, the partners of Van, Bakel, and Cox (who share profits and losses in the ratio of 5:3:2, respectively) decide to terminate operations and liquidate their partnership. The trial balance at this date follows: Credit Debit $ 37,000 104,000 90,000 227,000 68,000 Cash Accounts receivable Inventory Machinery and equipment, net Van, loan Accounts payable Bakel, loan Van, capital Bakel, capital Cox, capital Totals $ 99,000 58,000 167,000 109,000 93,000 $ 526,000 $ 526,000 The partners plan a program of piecemeal conversion of the partnership's assets to minimize liquidation losses. All available cash, less an amount retained to provide for future expenses, is to be distributed to the partners at the end of each month. A summary of the liquidation transactions follows: January Collected $70,000 of the accounts receivable; the balance is deemed uncollectible. Received $57,000 for the entire inventory. Paid $5,000 in liquidation expenses. Paid $93,000 to the outside creditors after offsetting a $6,000 credit memorandum received by the partnership on January 11. Retained $29,000 cash in the business at the end of January to cover liquidation expenses. The remainder is distributed to the partners. February Paid $6,000 in liquidation expenses. Retained $17,000 cash in the business at the end of the month to cover additional liquidation expenses. March Received $165,000 on the sale of all machinery and equipment. Paid $8,000 in final liquidation expenses. Retained no cash in the business. Prepare proposed schedules of liquidation on January 31, February 28, and March 31 to determine the safe payments made to the partners at the end of each of these three months. Prepare proposed schedules of liquidation on January 31, February 28, and March 31 to determine the safe payments made to the partners at the end of each of these three months. Complete this question by entering your answers in the tabs below. January February March Prepare proposed schedule of liquidation to determine the safe payments made to the partners at the end of January. (Amounts to be deducted should be entered with a minus sign.) VAN, BAKEL, AND COX PARTNERSHIP Proposed Schedule of Liquidation January 31 Noncash Van, Capital Bakel, Cash Liabilities and Loan Assets Capital and Cox, Capital 20% 50% Loan 30% Balances - January 1 Collected accounts receivable Sold inventory Paid liquidation expenses Paid accounts payable Subtotal (actual balances) 0 Maximum loss on assets Maximum liquidation expenses Subtotal (potential balances) $ 0 0 Allocation of deficit capital balance Safe payments to partners - January 31 $ $ $ 0 $ $ 0 0 0 0 0 0 0 0 0 0 $ 0 0 0 0 January February March Prepare proposed schedule of liquidation to determine the safe payments made to the partners at the end of February. (Amounts to be deducted should be entered with a minus sign.). VAN, BAKEL, AND COX PARTNERSHIP Proposed Schedule of Liquidation February 28 Cash Noncash Assets Liabilities Van, Capital Bakel, Capital and Loan 50% and Loan 30% Cox, Capital 20% 0 0 0 0 0 0 0 0 0 0 0 0 Balances before January 31 safe payments Safe payments to partners - January 31 Balances - February 1 Paid liquidation expenses Subtotal (actual balances) Maximum loss on assets Maximum liquidation expenses Subtotal (potential balances) Allocation of deficit capital balance Safe payments to partners - February 28 0 0 0 0 0 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Complete this question by entering your answers in the tabs below. January February March Prepare proposed schedule of liquidation to determine the safe payments made to the partners at the end of March. (Amounts to be deducted should be entered with a minus sign.). VAN, BAKEL, AND COX PARTNERSHIP Proposed Schedule of Liquidation March 31 Van, Cash Noncash Cox, Capital Assets Liabilities Capital and Bakel, Capital Loan 50% and Loan 30% 20% 0 0 0 0 0 Balances before February 28 safe payments Safe payments to partners - February 28 Balances - March 1 Sold machinery Paid liquidation expenses Subtotal (actual balances) Safe payments to partners - March 31 Ending balances - March 31 0 0 0 0 0 0 $ $ 0 $ 0 $ 0 $ 0 $ 0 January February March Prepare proposed schedule of liquidation to determine the safe payments made to the partners at the end of February. (Amounts to be deducted should be entered with a minus sign.). VAN, BAKEL, AND COX PARTNERSHIP Proposed Schedule of Liquidation February 28 Cash Noncash Assets Liabilities Van, Capital Bakel, Capital and Loan 50% and Loan 30% Cox, Capital 20% 0 0 0 0 0 0 0 0 0 0 0 0 Balances before January 31 safe payments Safe payments to partners - January 31 Balances - February 1 Paid liquidation expenses Subtotal (actual balances) Maximum loss on assets Maximum liquidation expenses Subtotal (potential balances) Allocation of deficit capital balance Safe payments to partners - February 28 0 0 0 0 0 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Complete this question by entering your answers in the tabs below. January February March Prepare proposed schedule of liquidation to determine the safe payments made to the partners at the end of March. (Amounts to be deducted should be entered with a minus sign.). VAN, BAKEL, AND COX PARTNERSHIP Proposed Schedule of Liquidation March 31 Van, Cash Noncash Cox, Capital Assets Liabilities Capital and Bakel, Capital Loan 50% and Loan 30% 20% 0 0 0 0 0 Balances before February 28 safe payments Safe payments to partners - February 28 Balances - March 1 Sold machinery Paid liquidation expenses Subtotal (actual balances) Safe payments to partners - March 31 Ending balances - March 31 0 0 0 0 0 0 $ $ 0 $ 0 $ 0 $ 0 $ 0

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Just In Time Accounting How To Decrease Costs And Increase Efficiency

Authors: Steven M. Bragg

3rd Edition

0470403721, 978-0470403723

More Books

Students also viewed these Accounting questions

Question

Explain the causes of indiscipline.

Answered: 1 week ago

Question

Identify ways to increase your selfesteem.

Answered: 1 week ago