Problem 12-6A Liquidation of a partnership LO P5

Kendra, Cogley, and Mei share income and loss in a 3:2:1 ratio. The partners have decided to liquidate their partnership. On the day of liquidation their balance sheet appears as follows.

KENDRA, COGLEY, AND MEI Balance Sheet May 31
Assets				Liabilities and Equity
Cash	$	105,800		Accounts payable	$	259,000
Inventory		541,200		Kendra, Capital		77,600
				Cogley, Capital		174,600
				Mei, Capital		135,800
Total assets	$	647,000		Total liabilities and equity	$	647,000

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. Amounts to be deducted or Losses should be entered with a minus sign. Round your final answers to the nearest whole dollar.) (1) Inventory is sold for $629,400. (2) Inventory is sold for $469,800. (3) Inventory is sold for $346,800 and any partners with capital deficits pay in the amount of their deficits. (4) Inventory is sold for $278,400 and the partners have no assets other than those invested in the partnership.

Complete this question by entering your answers in the tabs below.

1 - Required 1 Inventory:

2 - Required 1 GJ:

(a) Record the sale of inventory.

(b) Allocate the gain(loss) on the sale of inventory to the partners.

(c) Record the payment of the liabilities.

(d) Record the disbursement of the remaining cash to the partners.

3 - Required 2 Inventory:

4 - Required 2 GJ:

(a) Record the sale of inventory.

(b) Allocate the gain(loss) on the sale of inventory to the partners.

(c) Record the payment of the liabilities.

(d) Record the disbursement of the remaining cash to the partners.

5 - Required 3 Inventory:

6 - Required 3 GJ:

(a) Record the sale of inventory.

(b) Allocate the gain(loss) on the sale of inventory to the partners.

(c) The partner(s) with deficit balances repay the amount of their deficit(s).

(d) Record the payment of the liabilities.

(e) Record the disbursement of the remaining cash to the partners.

7 - Required 4 Inventory:

8 - Required 4 GJ:

(a) Record the sale of inventory for $278,400.

(b-1) Record the allocation of the gain or loss on the sale of inventory to the partners.

(b-2) Assuming that the partners have no assets other than those invested, allocate any partner(s) deficit balances to the remaining partners.

(c) Record the payment of the liabilities.

(d) Record the disbursement of the remaining cash to the partner(s).

Required 1 Required 2 Required 1 G Required 3 Required 2 GJ Inventory Required 4 Required 3 GJ Inventory Inventory Required 4 GJ Inventory Complete the schedule allocating the gain or loss on the sale of inventory is $629,400. Step 1) Determination of Gain (Loss) Proceeds from the sale of inventory $ 629,400 Inventory cost 541,200 $ 88,200 Step 2) Allocation of the Gain (Loss) to the Partners. KENDRA COGLEY MEI Total Initial capital balances $ 77,600 $ 174,600 $ 135,800 $ 388,000 Allocation of gains (losses) 0 Capital balances after gains (losses) $ 77,600 $ 174,600 $ 135,800 $ 388,000 Required 4 Inventory Required 4 G) Required 1 Required 2 Required 1 GJ Required 3 Inventory Inventory Required 2 GJ Inventory Required 3 G) Complete the schedule allocating the gain or loss on the sale of inventory is $469,800. Step 1) Determination of Gain (Loss) Proceeds from the sale of inventory $ 469,800 Inventory cost Step 2) Allocation of the gain (Loss) to the Partners. KENDRA Initial capital balances $ 77,600 Allocation of gains (losses) Capital balances after gains (losses) 77,600 COGLEY $ 174,600 $ MEI Total 135,800 $ 388,000 0 135,800 $ 388,000 $ $ 174,600 $ Required 1 Required 2 Required 1 G Required 3 Inventory Required 2 G Required 4 Inventory Required 3 GJ Inventory Inventory Required 4 G] Complete the schedule allocating the gain or loss on the sale of inventory is $346,800 and any partners with capital deficits pay in the amount of their deficits. Step 1) Determination of Gain (Loss) Proceeds from the sale of inventory $ 346,800 Inventory cost MEI Step 2) Allocation of the Gain (Loss) to the Partners. KENDRA Initial capital balances 77,600 Allocation of gains (losses) Capital balances after gains (losses) $ 77,600 COGLEY $ 174,600 Total 388,000 $ $ 135,800 $ 0 $ 174,600 $ 135,800 $ 388,000 Required 1 Required 1 G Required 2 Required 3 Required 2 GJ Required 3 GJ Required 4 Inventory Inventory Inventory Required 4 G) Inventory Complete the schedule allocating the gain or loss on the sale of inventory $278,400 and the partners have no assets other than those invested in the partnership. Step 1) Determination of gain (loss) Proceeds from the sale of inventory $ 278,400 Inventory Cost MEI Total $ $ 135,800 $ 388,000 Step 2) Allocation of the gain (loss) to the partners and distribution of deficit(s) KENDRA COGLEY Initial capital balances 77,600 $ 174,600 Allocation of gains (losses) Capital balances after gains (losses) 77,600 174,600 Allocation of deficit balance Capital balances after deficit allocation $ 77,600 $ 174,600 0 135,800 388,000 0 $ 135,800 $ 388,000