Problem 12-6A (Algo) Liquidation of a partnership LO P5 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. Required: For each of the following scenarios, complete the schedule allocating the gain or loss on the sale of inventory. Prepare journ entries to record the below transactions. Note: Do not round intermediate calculations. Enter losses and partner deficits, if any, as negative amounts. 1. Inventory is sold for $618,600. 2. Inventory is sold for $426,600. 3. Inventory is sold for $351,000 and partners with deficits pay their deficits in cash. 4. Inventory is sold for $241,200 and partners with deficits do not pay their deficits. Prepare journal entries to record the inventory is sold for $426,600. 1 Record the sale of inventory. 2 Allocate the gain(loss) on the sale of inventory to the partners. 3 Record the payment of the liabilities. 4 Record the disbursement of the remaining cash to the partners. Complete the schedule allocating the gain or loss on the sale of inventory is $351,000 and partners with deficits pay their deficits in ca Prepare journal entries to record the inventory is sold for $351,000 and partners with deficits pay their deficits in cash. Complete the schedule allocating the gain or loss on the sale of inventory $241,200 and partners with deficits do not pay their deficits \begin{tabular}{|c|c|c|c|c|c|c|} \hline \multirow{2}{*}{\multicolumn{7}{|c|}{\begin{tabular}{l} Proceeds from the sale of inventory \\ Inventory cost \end{tabular}}} \\ \hline - & & & & & & \\ \hline \multirow{2}{*}{\multicolumn{7}{|c|}{ Step 2) Allocation of the gain (loss) to the partners and distribution of deficit(s) }} \\ \hline & KENDRA & & & & & \\ \hline Intial capital balances & $77,100 & \begin{tabular}{l} COGLEY \\ \$ 173,475 \end{tabular} & & MEI & & Total \\ \hline \multirow{2}{*}{\multicolumn{7}{|c|}{ Allocation of gains (losses) }} \\ \hline \multirow{2}{*}{\multicolumn{7}{|c|}{ Capital balances after gains (losses) }} \\ \hline \multirow{2}{*}{\multicolumn{7}{|c|}{ Allocation of deficit balance }} \\ \hline Caphal balances affer deficit allocation & & & & & & \\ \hline & & & & & & \\ \hline \end{tabular} Prepare journal entries to record the inventory is sold for $241,200 and partners with deficits do not pay their deficits. 1 Record the sale of inventory for $241,200. 2 Record the allocation of the gain or loss on the sale of inventory to the partners. 3 Assuming that the partners have no assets other than those invested, allocate any partner(s) deficit balances to the remaining partners. 4 Record the payment of liablities. 5 Record the disbursement of the remaining cash to the partner(s)
