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.
| Balance Sheet |
| Assets | | Liabilities | |
| Cash | $ 83,800 | Accounts payable | $ 257,500 |
| Inventory | 544,200 | Equity | |
| | | Kendra, Capital | 74,100 |
| | | Cogley, Capital | 166,725 |
| | | Mei, Capital | 129,675 |
| Total assets | $ 628,000 | Total liabilities and equity | $ 628,000 |
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. (Do not round intermediate calculations. Enter losses and partner deficits, if any, as negative amounts.) 1. Inventory is sold for $610,200. 2. Inventory is sold for $449,400. 3. Inventory is sold for $350,400 and partners with deficits pay their deficits in cash. 4. Inventory is sold for $283,200 and partners with deficits do not pay their deficits.
Problem 12-3A (Algo) Part 3 3. The partners agreed to share income and loss by providing annual salary allowances of $36,000 to Ries, $31,000 to Bax, and $43,000 to Thomas; granting 10% interest on the partners' beginning capital investments; and sharing the remainder equally. Answer is not complete. Complete this question by entering your answers in the tabs below. Appropriation of profits General Journal Allocate $387,300 net income by providing annual salary allowances of $36,000 to Ries, $31,000 to Bax, and $43,000 to Thomas; granting 10% interest on the partners' beginning capital investments; and sharing the remainder equally. Ries Bax Thomas Total $ 36,000 $ 31.000 $ 43,000 110.000 Supporting Calculations Net income Salary allowances Balance after salary allowances Interest allowances Balance after interest and salaries Balance allocated equally Balance of income Shares of the partners (110,000) 17,800 4.600 6,200 7,000 82,500 X 82,500 X (127,800) 82,500 X 247,500 $ (375,300) 132,500 $ 123,100 119,700 $ Appropriation of profits General Journal > Problem 12-5A (Algo) Part 1 1. Prepare the journal entry to record Benson's withdrawal under each independent assumptions. (Do not round intermediate calculations.) (a) Benson sells her interest to North for $160,000 after North is approved as a partner; (b) Benson gives her interest to a son-in-law, Schmidt, and Schmidt is approved as a partner; () Benson is paid $69,000 in partnership cash for her equity; (d) Benson is paid $107,000 in partnership cash for her equity. Answer is not complete. No Transaction General Journal Credit Debit 69,000 1 (a) Benson, Capital North, Capital 69,000 2 (b) 69,000 Benson, Capital Schmidt, Capital 69,000 3 (c) 69,000 Benson, Capital Cash 69,000 4 (d) 69,000 Benson, Capital Meir, Capital Lau, Capital Problem 12-5A (Algo) Partner withdrawal and admission LO P3, P4 (The following information applies to the questions displayed below.) Meir, Benson, and Lau are partners and share income and loss in a 3.2:5 ratio (in percents: Meir, 30%; Benson, 20%, and Lau, 50%). The partnership's capital balances are as follows: Meir, $103,000; Benson, $69,000; and Lau, $178,000. Benson decides to withdraw from the partnership. Problem 12-5A (Algo) Part 2 2. Assume that Benson does not retire from the partnership described in Part 1. Instead, Rhode is admitted to the partnership on February 1 with a 25% equity. Prepare journal entries to record Rhode's entry into the partnership under each separate assumption: Rhode invests (a) $116,667; (b) $85,167; and () $152,834. (Do not round intermediate calculations.) View transaction list View journal entry worksheet NO General Journal Credit Transaction (a) Debit 116,667 1 Cash Rhode, Capital 116,667 2 (b) Cash Meir, Capital Benson, Capital Lau, Capital Rhode, Capital 3 (c) Cash 152.834 Meir, Capital Benson, Capital Lau, Capital Rhode, Capital 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. (Do not round intermediate calculations. Enter losses and partner deficits, if any, as negative amounts.) 1. Inventory is sold for $610,200. 2. Inventory is sold for $449,400. 3. Inventory is sold for $350,400 and partners with deficits pay their deficits in cash. 4. Inventory is sold for $283,200 and partners with deficits do not pay their deficits. Complete this question by entering your answers in the tabs below. Required 1 Inventory Required 1 G Required 2 Inventory Required 2 G Required 3 Inventory Required 3 G Required 4 Inventory Required 4 GJ Complete the schedule allocating the gain or loss on the sale of inventory is $610,200. Step 1) Determination of Gain (Loss) Proceeds from the sale of inventory $ 610,200 Inventory cost 544.200 Gain on sale $ 66,000 Step 2) Allocation of the Gain (Loss) to the Partners. KENDRA Initial capital balances $ 74,100 Allocation of gains (losses) Capital balances after gains (losses) 74.100 MEI COGLEY $ 166,725 $ 129,675 $ Total 370,500 0 370,500 $ 166,725 $ 129,675 $ Complete this question by entering your answers in the tabs below. Required 1 Inventory Required 1 GJ Required 2 Inventory Required 2 G Required 3 Inventory Required 3 G Required 4 Inventory Required 4 GJ Prepare journal entries to record the inventory is sold for $610,200. View transaction list View journal entry worksheet No Transaction General Journal Debit Credit 1 (a) 610.200 Cash Inventory Gain on sale of inventory 544,200 66,000 c N 2 (b) 66,000 Gain on sale of inventory Kendra, Capital Cogley, Capital Mei, Capital 3 (C) 257,500 Accounts payable Cash 257,500 4 (d) Kendra, Capital Cogley, Capital Mei, Capital Cash Complete this question by entering your answers in the tabs below. Required 1 Inventory Required 1 GJ Required 2 Inventory Required 2 G Required 3 Inventory Required 3 G Required 4 Inventory Required 4 GJ Prepare journal entries to record the inventory is sold for $610,200. View transaction list View journal entry worksheet No Transaction General Journal Debit Credit 1 (a) 610.200 Cash Inventory Gain on sale of inventory 544,200 66,000 c N 2 (b) 66,000 Gain on sale of inventory Kendra, Capital Cogley, Capital Mei, Capital 3 (C) 257,500 Accounts payable Cash 257,500 4 (d) Kendra, Capital Cogley, Capital Mei, Capital Cash Complete this question by entering your answers in the tabs below. Required 1 Inventory Required 1 G) Required 2 Inventory Required 2G) Required 3 Inventory Required 3 G Required 4 Inventory Required 4 G) Complete the schedule allocating the gain or loss on the sale of inventory is $449,400. Step 1) Determination of Gain (Loss) Proceeds from the sale of inventory Inventory cost $ 449,400 MEI Step 2) Allocation of the Gain (Loss) to the Partners. KENDRA Initial capital balances $ 74,100 Allocation of gains (losses) Capital balances after gains (losses) $ 74,100 COGLEY $ 166,725 $ 129,675 $ Total 370,500 0 370,500 $ 166,725 $ 129,675 $ Complete this question by entering your answers in the tabs below. Required 1 Inventory Required 1 G Required 2 Inventory Required 2 G Required 3 Inventory Required 3 G Required 4 Inventory Required 4 G) Complete the schedule allocating the gain or loss on the sale of inventory is $350,400 and partners with deficits pay their deficits in cash. Step 1) Determination of Gain (Loss) Proceeds from the sale of inventory Inventory cost $ 350,400 MEI Total Step 2) Allocation of the Gain (Loss) to the Partners. KENDRA Initial capital balances $ 74,100 Allocation of gains (losses) Capital balances after gains (losses) $ 74,100 COGLEY $ 166,725 $ 129,675 $ 370,500 0 $ 166,725 $ 129,675 $ 370,500
