Question
Statement of Liquidation - Installment Assume Louise, Karlos, Raya and Al are partners sharing profits 40%, 20%, 20%, 20% respectively. On January 1, 2018 they
Statement of Liquidation - Installment
Assume Louise, Karlos, Raya and Al are partners sharing profits 40%, 20%, 20%, 20% respectively. On January 1, 2018 they agree to liquidate. A balance sheet prepared on this date is shown as follows:
Assets
Non-Cash Assets 181,800.00
Total 181,800.00
Liabilities and Capital
Liabities 84,000.00
Louise, Loan 6,000.00
Raya, Loan 3,000.00
Louise, Capital 26,400.00
Karlos, Capital 25,800.00
Raya, Capital 20,400.00
Al, Capital 16,200.00
Total 181,800.00
The result of liquidation are summarized below:
January 2018
Cash proceeds = 72,000.00
Book value = 90,000.00
Liquidating expenses = 1,200.00
Payment to creditors = 66,000.00
Cash withheld = 4,800.00
February 2018
Cash proceeds = 21,600.00
Book value = 30,000.00
Liquidating expenses = 1,320.00
Payment to creditors = 18,000.00
Cash withheld = 1,800.00
March 2018
Cash proceeds = 19,200.00
Book value = 24,000.00
Liquidating expenses = 1,440.00
Payment to creditors = 0
Cash withheld = 1,200.00
April 2018
Cash proceeds = 6,000.00
Book value = 19,800.00
Liquidating expenses = 4,800.00
Payment to creditors = 0
Cash withheld = 600.00
May 2018
Cash proceeds = 2,400.00
Book value = 18,000.00
Liquidating expenses = 960.00
Payment to creditors = 0
Cash withheld = 0
Instruction:
Make a statement of installment liquidation using safe payments and cash priority program.
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Intermediate Accounting Reporting and Analysis
Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach
3rd edition
9781337909402, 978-1337788281
