QUESTION 3 Use the following information for questions 16-18: The Aman, Dana, and Saara Partnership has asked you to assist in winding-up its business affairs. The partners share profits and losses as follows: Aman - 50%, Dana - 30%, Saara -20%. You compile the following trial balance information as of June 30, 20X8: Credit Debit $6,000 22,000 14,000 99,000 Cash Accounts Receivable Inventory Plant & Equipment (net) Accounts Payable Aman, Capital Dana, Capital Saara, Capital Total $17,000 55,000 45,000 24,000 $141,000 $141,000 The partners have elected to liquidate their partnership by installments. Cash will be distributed to the partners at the end of each month. During the month of September, the partnership completed its liquidation and: Received $75,000 for the remaining property, plant, and equipment Paid $1,000 in liquidation expenses. Upon completion of the liquidation, how much capital will remain in Aman's capital account? a. $41,500 b. $42,000 C. $52,000 d. $0 Use the following information for questions 16-18: The Aman, Dana, and Saara Partnership has asked you to assist in winding-up its business affairs. The partners share profits and losses as follows: Aman - 50%, Dana - 30%, Saara - 20%. You compile the following trial balance information as of June 30, 20X8: Debit Credit Cash $6,000 Accounts Receivable 22,000 Inventory 14,000 Plant & Equipment (net) 99.000 Accounts Payable $17.000 Aman, Capital 55.000 Dana, Capital 45,000 Saara, Capital 24,000 Total $141.000 $141.000 The partners have elected to liquidate their partnership by installments. Cash will be distributed to the partners at the end of each month. During the month of July, the partnership: Received $10,000 for all of its inventory. Collected $16,500 of its accounts receivable and determined the remainder was uncollectible. Paid $1,000 in liquidation expense. Paid $17,000 to outside creditors. Maintained a balance of $8,000 in cash at the end of the month. What safe payments, if any, can be made to which partner(s) at the end of July? a. $3,750 to Aman b. $7,500 to Dana, $1,000 to Saara C. $6,500 to Dana d. No safe payments can be made. Use the following information for questions 16-18: The Aman, Dana, and Saara Partnership has asked you to assist in winding-up its business affairs. The partners share profits and losses as follows: Aman - 50%, Dana - 30%, Saara - 20%. You compile the following trial balance information as of June 30, 20X8: Cash Debit Credit $6,000 Accounts Receivable 22.000 Inventory 14,000 Plant & Equipment (net) 99,000 Accounts Payable $17.000 Aman, Capital 55,000 Dana, Capital 45,000 Saara, Capital 24,000 Total $141.000 $141,000 The partners have elected to liquidate their partnership by installments. Cash will be distributed to the partners at the end of each month. During the month of August, the partnership: Paid $1,500 in liquidation expenses. As part of the liquidation against her capital, Saara agreed to accept computer equipment, which she had developed, that had a book value of $4,000. The partners agree that a value of $10,000 would be assigned for liquidation purposes. Maintained a balance of $2,500 in cash at the end of the month. What gain or loss will be recognized by the partnership on the computer equipment provided to Saara and how will it be allocated? a. $6,000 loss; $3,750 to Aman, $2,250 to Dana, SO to Saara b. $6,000 gain; $3,000 to Aman, $1,800 to Dana, $1,200 to Saara c. $8.800 loss to Saara d. No gain or loss is recognized when assets are distributed to partners in liquidation
