Question

In: Accounting

Prior to liquidating their partnership, Jolly and Bain had capital accounts of $18,000 and $68,000, respectively....

Prior to liquidating their partnership, Jolly and Bain had capital accounts of $18,000 and $68,000, respectively. The partnership assets were sold for $34,000. The partnership had no liabilities. Jolly and Bain share income and losses equally.

Required:

a. Determine the amount of Jolly's deficiency.
$

b. Determine the amount distributed to Bain, assuming Jolly is unable to satisfy the deficiency.

Solutions

Expert Solution

Particulars Amount (in $ )
Sale value of assets $ 34,000
Less : Carrying value of assets
             ( $ 18,000 + $ 68,000 )		 ($ 86,000)
Loss on liquidation $ 52,000
(a)
Amount of Jolly's deficiency
         = Balance before liquidation (-) Share of Loss
         =    $ 18,000 (-) [ $ 52,000 x 50% ]
        =   $ 18,000 (-) $ 26,000		 ($ 8,000)
(b)
Amount distributed to Bain
           = Balance before liquidation (-) Share of Loss (-) Jolly's deficiency
         =    $ 68,000 (-) [ $ 52,000 x 50% ] (-) $ 8,000
         =    $ 68,000 (-) $ 26,000 (-) $ 8,000		 $ 34,000

ekkarill92 answered 3 years ago
Next > < Previous

Related Solutions

Prior to liquidating their partnership, Perkins and Montgomery had capital accounts of $73,000 and $125,000, respectively....
Prior to liquidating their partnership, Perkins and Montgomery had capital accounts of $73,000 and $125,000, respectively. Prior to liquidation, the partnership had no cash assets other than what was realized from the sale of assets. These partnership assets were sold for $190,000. The partnership had $8,000 of liabilities. Perkins and Montgomery share income and losses equally. Determine the amount received by Perkins as a final distribution from liquidation of the partnership.
  Prior to liquidating their partnership, Samuel and Brian had capital accounts of $60,000 and $240,000,...
  Prior to liquidating their partnership, Samuel and Brian had capital accounts of $60,000 and $240,000, respectively. The partnership assets were sold for $120,000. The partnership had no liabilities. Samuel and Brian share income and losses equally   Required: a. Determine the amount of Samuel's deficiency b. Determine the amount distributed to Brian, assuming Samuel is unable to satisfy the deficiency
Question (a): Prior to liquidating their partnership, Perkins and Brooks had capital accounts of $46,000 and...
Question (a): Prior to liquidating their partnership, Perkins and Brooks had capital accounts of $46,000 and $74,000, respectively. Prior to liquidation, the partnership had no cash assets other than what was realized from the sale of assets. These partnership assets were sold for $144,000. The partnership had $5,000 of liabilities. Perkins and Brooks share income and losses equally. Determine the amount received by Brooks as a final distribution from liquidation of the partnership. Question (b): Steve Conyers and Chelsy Poodle...
1. Prior to liquidating their partnership, Craig and Jenny had capital accounts of $74,060 and $125,920,...
1. Prior to liquidating their partnership, Craig and Jenny had capital accounts of $74,060 and $125,920, respectively. The partnership assets were sold for $242,930. The partnership had $27,060 of liabilities. Craig and Jenny share income and losses equally. Determine the amount received by Jenny as a final distribution from liquidation of the partnership. 2. Emerson and Dakota formed a partnership dividing income as follows: Annual salary allowance to Emerson of $39,600 Interest of 10% on each partner's capital balance on...
After the accounts are closed on April 10, prior to liquidating the partnership, the capital accounts...
After the accounts are closed on April 10, prior to liquidating the partnership, the capital accounts of Zach Fairchild, Austin Lowes, and Amber Howard are $42,000, $7,500, and $36,500, respectively. Cash and noncash assets total $23,500 and $84,500, respectively. Amounts owed to creditors total $22,000. The partners share income and losses in the ratio of 1:1:2. Between April 10 and April 30, the noncash assets are sold for $48,500, the partner with the capital deficiency pays the deficiency to the...
After the accounts are closed on February 3, 2016, prior to liquidating the partnership, the capital...
After the accounts are closed on February 3, 2016, prior to liquidating the partnership, the capital accounts of William Gerloff, Joshua Chu, and Courtney Jewett are $19,520, $4,080, and $22,180, respectively. Cash and noncash assets total $4,880 and $55,940, respectively. Amounts owed to creditors total $15,040. The partners share income and losses in the ratio of 2:1:1. Between February 3 and February 28, the noncash assets are sold for $36,020, the partner with the capital deficiency pays the deficiency to...
After the accounts are closed on February 3, 2016, prior to liquidating the partnership, the capital...
After the accounts are closed on February 3, 2016, prior to liquidating the partnership, the capital accounts of William Gerloff, Joshua Chu, and Courtney Jewett are $19,680, $4,960, and $21,840, respectively. Cash and noncash assets total $5,100 and $56,140, respectively. Amounts owed to creditors total $14,760. The partners share income and losses in the ratio of 2:1:1. Between February 3 and February 28, the noncash assets are sold for $32,700, the partner with the capital deficiency pays the deficiency to...
After closing the accounts on July 1, prior to liquidating the partnership, the capital account balances...
After closing the accounts on July 1, prior to liquidating the partnership, the capital account balances of Gold, Porter, and Sims are $28,500, $40,200, and $18,000, respectively. Cash, noncash assets, and liabilities total $45,900, $74,700, and $33,900, respectively. Between July 1 and July 29, the noncash assets are sold for $59,700, the liabilities are paid, and the remaining cash is distributed to the partners. The partners share net income and loss in the ratio of 3:2:1. Prepare a statement of...
After closing the accounts on July 1, prior to liquidating the partnership, the capital account balances...
After closing the accounts on July 1, prior to liquidating the partnership, the capital account balances of Gold, Porter, and Sims are $35,700, $50,400, and $22,500, respectively. Cash, noncash assets, and liabilities total $52,800, $93,600, and $37,800, respectively. Between July 1 and July 29, the noncash assets are sold for $75,000, the liabilities are paid, and the remaining cash is distributed to the partners. The partners share net income and loss in the ratio of 3:2:1. Prepare a statement of...
Statement of Partnership Liquidation After closing the accounts on July 1, prior to liquidating the partnership,...
Statement of Partnership Liquidation After closing the accounts on July 1, prior to liquidating the partnership, the capital account balances of Gold, Porter, and Sims are $31,800, $45,000, and $20,100, respectively. Cash, noncash assets, and liabilities total $47,100, $83,400, and $33,600, respectively. Between July 1 and July 29, the noncash assets are sold for $66,600, the liabilities are paid, and the remaining cash is distributed to the partners. The partners share net income and loss in the ratio of 3:2:1....
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT