Q.2

The partnership of Wingler, Norris, Rodgers, and Guthrie was formed several years ago as a local architectural firm. Several partners have recently undergone personal financial problems and have decided to terminate operations and liquidate the business. The following balance sheet is drawn up as a guideline for this process: Cash Accounts receivable Inventory Land Building and equipment (net) $ 65,000 132,000 151,000 110,000 193,000 Liabilities Rodgers, loan Wingler, capital (308) Norris, capital (108) Rodgers, capital (208) Guthrie, capital (40%) Total liabilities and capital $ 54,000 85,000 195,000 138,000 99,000 80,000 $651,000 Total assets $651,000 When the liquidation commenced, liquidation expenses of $20,000 were anticipated as being necessary to dispose of all property. Part A Prepare a predistribution plan for this partnership Part B The following transactions transpire during the liquidation of the Wingler, Norris, Rodgers, and Guthrie partnership: 1. Collected 90 percent of the total accounts receivable with the rest judged to be uncollectible. 2. Sold the land, bullding, and equipment for $175,000. 3. Distributed safe payments of cash. 4. Learned that Guthrie, who has become personally Insolvent will make no further contributions 5. Pald all liabilities, 6. Sold all inventory for $96,000. 7. Distributed safe payments of cash again. 8. Paid actual liquidation expenses of $14,000 only. 9. Made final cash disbursements to the partners based on the assumption that all partners other than Guthrie are personally solvent Prepare journal entries to record these liquidation transactions. 7. Distributed safe payments of cash again. 8. Pald actual liquidation expenses of $14,000 only. 9. Made final cash disbursements to the partners based on the assumption that all partners other than Guthrie are personally solvent. Prepare journal entries to record these liquidation transactions. Complete this question by entering your answers in the tabs below. Required A Required B Prepare a predistribution plan for this partnership. (Do not round intermediate calculations.) Wingler, Capital Norris, Capital Rodgers, Loan and Capital Guthrie, Capital $ 0 $ 0$ 0 $ 0 Beginning balances Assured loss of Schedule 1 Step one balances Assumed loss of Schedule 2 Step two balances Assumed loss of Schedule 3 Step three balances $ 0 $ 0 $ 0 $ 0 s 0 $ 0 $ 0 $ 0 Ierod Required B > Required A Required B Prepare journal entries to record these liquidation transactions. (Do not round intermediate calculations. Round the final answers to nearest dollar amounts. If no entry is required for a particular transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 2 3 4 5 6 7 8 9 10 Record the cash received from accounts receivable and loss allocated to partners. Note: Enter debits before credits Transaction 01 General Journal Debit Credit Record entry Clear entry View general Journal Prepare journal entries to record these liquidation transactions. (Do not round intermediate calculations. Round the final answers to nearest dollar amounts. If no entry is required for a particular transaction/event, select "No journal entry required in the first account field.) View transaction list Journal entry worksheet . 1 Record the entry for initial distribution of cash as per predistribution plan, ces Note: Enter debits before credits Transaction 03 General Journal Dobit Credit Record entry Clear entry View general Journal Prepare journal entries to record these liquidation transactions. (Do not round intermediate calculations, Round the final answers to nearest dollar amounts. If no entry is required for a particular transaction/event, select "No journal entry required in the first account field.) View transaction list Journal entry worksheet 1 2 3 4 5 6 7 8 9 10 Record Guthrie's insolvency. es Note: Enter debits before credits General Journal Debit Credit Transaction 04 Record entry Clear entry View general Journal Prepare journal entries to record these liquidation transactions. (Do not round intermediate calculations. Round the final answers to nearest dollar amounts. If no entry is required for a particular transaction/event, select "No journal entry required in the first account field.) View transaction list Journal entry worksheet 2 3 4 5 6 7 8 9 10 Record the settlement of all liabilities Note: Enter debits before credits General Journal Transaction 05 Debit Credit Record entry Clear entry View general Journal Required A Required B Prepare journal entries to record these liquidation transactions. (Do not round intermediate calculations. Round the final answers to nearest dollar amounts. If no entry is required for a particular transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the distribution of cash as per predistribution plan. es Note: Enter debits before credits General Journal Transaction 07 Debit Credit Record entry Clear entry View general Journal Required A Required B Prepare journal entries to record these liquidation transactions. (Do not round intermediate calculations. Round the final answers to nearest dollar amounts. If no entry is required for a particular transaction/event, select "No journal entry required in the first account field.) View transaction list Journal entry worksheet Record the elimination of deficit balance of Insolvent partner. 5 Note: Enter debits before credits. General Journal Debit Credit Transaction 9.a Record entry Clear entry View general Journal Required A Required B Prepare journal entries to record these liquidation transactions. (Do not round intermediate calculations. Round the final answers to nearest dollar amounts. If no entry is required for a particular transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet