PART A (30 points) Information Wind & Rambler agree to form a partnership on January 1, 2020. Wind has operated a business as a sole proprietorship for a number of years and will contribute the net assets of his business to the partnership. The appraised value of the net assets in Wind's business are given below Cash 25,000 Receivables Inventory 215,000 Property, plant & equipment, bet 180,000 Accounts payable - 120.000 Accrued liabilities -$5,000 Mortgape payable -30.000 Net Assets 315,000 100.000 Rambler has significant experience in marketing and will 340,000 contribute cash in the amount of Wind & Ramblor agree to begin operations with equal capital balances. The purtnership proement also indicates that the bonus method will be used to count for any changes in partner ownership The Articles of Partnership (the partnership agreement provide that income and losses are to be allocated in the following manner Wind is to receive a salary of 75,000 Rambler is to receive a salary of 65,000 Interest is calculated on the beginning Capital balances at a rate 896 of The remaining pain or loss is to be allocated to Wind & Rambler in the ratio of 3:2 Each partner is provided a monthly draw of 1.500 Income for 2020 amounted to 250,000 On January 2, 2021, Donner joined the partnership by paying a total of $350,000 to Wind & Rambler directly. For this payment. Donner received a 20% partnership interest of The partnership agreement was revised to allow Donner a salary of 30.000 Winds & Rambler's salaries remain unchanged * Interest is allowed on all partner's beginning capital balances at the rate previously stated The remaining gain or lows it to be split to Wind, Rambler & Donner in the ratio of 32:5 Each partner is provided a monthly draw of 1.800 Income for 2021 amounted to 225.000 On January 1, 2022, Wind decided to retire and sold his partnership interest directly to Macbelle Rambler and Donner agreed to the sale and admission of Machelle into the partnership. The partnership agreement was changed to reflect Macbelle taking the place of Wind. All salary, interest and profit allocations previously provided to Window goes to Macbelle. Machelle is also allowed a monthly draw cqual to Wind's prior draw Income for 2022 amounted to 280,000 Required: 1. For each of the years 2000 - 2022. prepare a Statement of Partnership Capital Schedule of income Allocation PART B (20 points) Ten years later, the partners Rambler, Donner and Macbello agree to liquidate the partnership. Their partnership capital and profit loss percentages at that time are shown below. Rambler 850,000 Donner 450,000 Macbelle 900,000 Liquidation expenses are expected to be 23.000 Required: Prepare a Pre-Distribution Plan to be used during the liquidation process PART A (30 points) Information Wind & Rambler agree to form a partnership on January 1, 2020. Wind has operated a business as a sole proprietorship for a number of years and will contribute the net assets of his business to the partnership. The appraised value of the net assets in Wind's business are given below Cash 25,000 Receivables Inventory 215,000 Property, plant & equipment, bet 180,000 Accounts payable - 120.000 Accrued liabilities -$5,000 Mortgape payable -30.000 Net Assets 315,000 100.000 Rambler has significant experience in marketing and will 340,000 contribute cash in the amount of Wind & Ramblor agree to begin operations with equal capital balances. The purtnership proement also indicates that the bonus method will be used to count for any changes in partner ownership The Articles of Partnership (the partnership agreement provide that income and losses are to be allocated in the following manner Wind is to receive a salary of 75,000 Rambler is to receive a salary of 65,000 Interest is calculated on the beginning Capital balances at a rate 896 of The remaining pain or loss is to be allocated to Wind & Rambler in the ratio of 3:2 Each partner is provided a monthly draw of 1.500 Income for 2020 amounted to 250,000 On January 2, 2021, Donner joined the partnership by paying a total of $350,000 to Wind & Rambler directly. For this payment. Donner received a 20% partnership interest of The partnership agreement was revised to allow Donner a salary of 30.000 Winds & Rambler's salaries remain unchanged * Interest is allowed on all partner's beginning capital balances at the rate previously stated The remaining gain or lows it to be split to Wind, Rambler & Donner in the ratio of 32:5 Each partner is provided a monthly draw of 1.800 Income for 2021 amounted to 225.000 On January 1, 2022, Wind decided to retire and sold his partnership interest directly to Macbelle Rambler and Donner agreed to the sale and admission of Machelle into the partnership. The partnership agreement was changed to reflect Macbelle taking the place of Wind. All salary, interest and profit allocations previously provided to Window goes to Macbelle. Machelle is also allowed a monthly draw cqual to Wind's prior draw Income for 2022 amounted to 280,000 Required: 1. For each of the years 2000 - 2022. prepare a Statement of Partnership Capital Schedule of income Allocation PART B (20 points) Ten years later, the partners Rambler, Donner and Macbello agree to liquidate the partnership. Their partnership capital and profit loss percentages at that time are shown below. Rambler 850,000 Donner 450,000 Macbelle 900,000 Liquidation expenses are expected to be 23.000 Required: Prepare a Pre-Distribution Plan to be used during the liquidation process
