Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Turner, Roth, and Lowe are partners who share income and loss in a 1:4:5 ratio. After lengthy disagreements among the partners and several unprofitable periods,

Turner, Roth, and Lowe are partners who share income and loss in a 1:4:5 ratio. After lengthy disagreements among the partners and several unprofitable periods, the partners decide to liquidate the partnership. Immediately before liquidation, the partnership balance sheet shows total assets, $157,200; total liabilities, $104,000; Turner, Capital, $5,100; Roth, Capital, $15,300; and Lowe, Capital, $32,800. The cash proceeds from selling the assets were sufficient to repay all but $41,000 to the creditors.

Liquidation of partnerships:

a.Calculate the loss from selling the assets.

b.Allocate the loss from partato the partners.

c.Determine how much, if any, each partner should contribute to the partnership to cover any remaining capital deficiency.

Part A: Calculate the loss from selling the assets.

Liabilities before liquidation, Proceeds from sale of assets (paid to creditors), Remaining liabilities, Proceeds from sale of assets, Book value of assets sold

Part B: Allocate the loss from part a to the partners.

Initial Capital Balances (Turner, Roth, Lowe, Total)

Allocation of gains or losses (Turner, Roth, Lowe, Total)

Capital balances after gains or losses (Turner, Roth, Lowe, Total)

Part C: Determine how much, if any, each partner should contribute to the partnership to cover any remaining capital deficiency.

Amount to be contributed to the partnership (Turner, Roth, Lowe, Total)

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

Step: 3

blur-text-image

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

Access For Computer Accounting

Authors: Donna Kay

19th Edition

1259741109, 9781259741104

More Books

Students also viewed these Accounting questions