Partner's Mayer, Kidd & Anderson want you to assist them in winding up the affairs of their partnership. You gather the following information: 1. The 12/31/18 trial balance of the partnership is as follows: Cash ....... .......... $ 20,500 Accounts receivable .............. 24,500 Inventory .......... 14,000 Plant & equipment (net) ....... 145,500 117.500 Notes receivable - Paton 500 000 Notes receivable - Davidson 500 Accounts payable 18,000 Capital, Mayer... 63,550 Capital, Kidd 39,150 Capital, Anderson ............ 57,300 (All balance are normal) The partners share profits and losses as follows: Mayer, 20%; Kidd, 42%; and Anderson, 38% 2. The partnership will liquidate over January, February and March with cash to be distributed to the partners at the end of each month. A summary of the liquidation transactions follows: January Collected $19,800 on accounts receivable; the balance is uncollectible. Received $17,100 for the entire inventory. 3. Paid $1,500 liquidation expenses. 4. Retained $9,800 cash in the business at month-end for estimated liquidation expenses. nim February Paid $1,600 liquidation expenses. Paid the creditors in full. Sold equipment with a book value of $26,000 for $19,180. As part payment of his capital, Anderson accepted a piece of special equipment that he developed that had a book value of $4,000. The partners agree that a $11,000 value should be placed on the machine for liquidation purposes. Anderson has agreed to return the equipment or pay $11,000 to the partnership if the need arises. The partners' accountant advises not giving Davidson the machine until the final distribution at the end of February. (You decide whether or not to follow the accountant's advice.) Retained $4,720 cash in the business at month-end for estimated liquidation expenses. March Received $75,000 on sale of remaining plant and equipment. 2. Paid $4,250 liquidation expenses. 3. No cash retained in the business. A. Required: Prepare a Cash Distribution Plan. Prepare a statement of partnership realization and liquidation for the partnership for the three-month period ended February 28, 2009. Support each cash distribution to the partners with a schedule of safe installment payments. March 31, 2009 Partner's Mayer, Kidd & Anderson want you to assist them in winding up the affairs of their partnership. You gather the following information: 1. The 12/31/18 trial balance of the partnership is as follows: Cash ....... .......... $ 20,500 Accounts receivable .............. 24,500 Inventory .......... 14,000 Plant & equipment (net) ....... 145,500 117.500 Notes receivable - Paton 500 000 Notes receivable - Davidson 500 Accounts payable 18,000 Capital, Mayer... 63,550 Capital, Kidd 39,150 Capital, Anderson ............ 57,300 (All balance are normal) The partners share profits and losses as follows: Mayer, 20%; Kidd, 42%; and Anderson, 38% 2. The partnership will liquidate over January, February and March with cash to be distributed to the partners at the end of each month. A summary of the liquidation transactions follows: January Collected $19,800 on accounts receivable; the balance is uncollectible. Received $17,100 for the entire inventory. 3. Paid $1,500 liquidation expenses. 4. Retained $9,800 cash in the business at month-end for estimated liquidation expenses. nim February Paid $1,600 liquidation expenses. Paid the creditors in full. Sold equipment with a book value of $26,000 for $19,180. As part payment of his capital, Anderson accepted a piece of special equipment that he developed that had a book value of $4,000. The partners agree that a $11,000 value should be placed on the machine for liquidation purposes. Anderson has agreed to return the equipment or pay $11,000 to the partnership if the need arises. The partners' accountant advises not giving Davidson the machine until the final distribution at the end of February. (You decide whether or not to follow the accountant's advice.) Retained $4,720 cash in the business at month-end for estimated liquidation expenses. March Received $75,000 on sale of remaining plant and equipment. 2. Paid $4,250 liquidation expenses. 3. No cash retained in the business. A. Required: Prepare a Cash Distribution Plan. Prepare a statement of partnership realization and liquidation for the partnership for the three-month period ended February 28, 2009. Support each cash distribution to the partners with a schedule of safe installment payments. March 31, 2009
