Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Several years ago, Ann Dennis, Jill Edwards, Lee Lacy, and Sarah Ingram formed a partnership to operate the Deli Sisters Cafe. Rerouting of bus lines

Several years ago, Ann Dennis, Jill Edwards, Lee Lacy, and Sarah Ingram formed a partnership to operate the Deli Sisters Cafe. Rerouting of bus lines caused declines in patronage to the extent that the partners have agreed to dissolve the partnership and liquidate the assets. The November 2, 2017, balance sheet of the Deli Sisters Cafe and other data appear below. The partnership agreement did not specify how profits and losses were to be shared.

DELI SISTERS CAF

Balance Sheet

November 2, 2017 Cash $30,000

Liabilities $50,100 Supplies 15,000

Loan-Ingram 20,000 Equipment 150,000

Capital-Dennis 52,000 Fixtures 40,000

Capital-Edwards 45,000

Capital-Lacy 19,900

Capital-Ingram 48,000 Total assets $235,000

Total liabilities and capital $235,000

Additonal information:

  1. During November, sold half of the fixtures for $5,000. Sold equipment with a book value of $30,000 for $22,000.
  2. During December, paid all outside creditors. A neighboring restaurant bought Deli Sisters Cafe's supplies at 80 percent of cost. Sold the remaining fixtures for $8,000.
  3. During January, sold equipment with a book value of $40,000 for $28,000.

Following the safe payment approach, specify how cash is to be distributed at the end of November, December, and January.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Corporate Financial Accounting

Authors: Carl S Warren, James M Reeve, Jonathan Duchac

11th Edition

0538480920, 9780538480925

More Books

Students also viewed these Accounting questions

Question

How can we measure quality of current assets?

Answered: 1 week ago

Question

2. What do the others in the network want to achieve?

Answered: 1 week ago

Question

1. What do I want to achieve?

Answered: 1 week ago