Question

In: Accounting

Joe, Jim, and Jay have been partners for several years. The partners allocate all profits and...

Joe, Jim, and Jay have been partners for several years. The partners allocate all profits and losses on a 4:4:2 basis, respectively. Now, each partner has become personally insolvent and, the three partners have decided to liquidate the business in hopes of solving their personal financial issues. As of September 1, the partnership’s balance sheet is as follows:

Assets

Liabilities and Capital

Cash

$

35,000

Liabilities

$

131,000

Accounts receivable

132,000

Joe, capital

60,000

Inventory

122,000

Jim, capital

99,000

Land, building, and equipment (net)

71,000

Jay, capital

70,000

Total assets

$

360,000

Total liabilities and capital

$

360,000

Required:

  1. Sold remaining accounts receivable for 35 percent of face value (2 points).
  2. Sold land, building, and equipment for $41,000 (1 point).
  3. Paid all remaining liabilities of the partnership (1 point).
  4. Distributed cash held by the business to the partners (2 points).

Solutions

Expert Solution

As they are partners we divide their partnership ratio respectively:

Accounts Receivable:

35% of face value= 132000*35/100=46200

Joe= 46200*4/10=18480

Jim= 46200*4/10=18480

Jay= 46200*2/10=9240

Land, building & Equipment= 41000

Joe=41000*4/10=16400

Jim=41000*4/10=16400

Jay=41000*2/10=8200

Liabilities=131000

Joe=131000*4/10=52400

Jay=131000*4/10=52400

Jim=131000*2/10=26200

Cash=35000

Joe=35000*4/10=14000

Jay=35000*4/10=14000

Jim=35000*2/10=7000

Hence all partners distributed their shares according to the partnership sharing ratio.

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

Joe, Jim, and Jay have been partners for several years. The partners allocate all profits and...
Joe, Jim, and Jay have been partners for several years. The partners allocate all profits and losses on a 4:4:2 basis, respectively. Now, each partner has become personally insolvent and, the three partners have decided to liquidate the business in hopes of solving their personal financial issues. As of September 1, the partnership’s balance sheet is as follows: Assets Liabilities and Capital Cash $ 35,000 Liabilities $ 131,000 Accounts receivable 132,000 Joe, capital 60,000 Inventory 122,000 Jim, capital 99,000 Land,...
March, April, and May have been in partnership for a number of years. The partners allocate...
March, April, and May have been in partnership for a number of years. The partners allocate all profits and losses on a 2:3:1 basis, respectively. Recently, each partner has become personally insolvent and, thus, the partners have decided to liquidate the business in hopes of remedying their personal financial problems. As of September 1, the partnership’s balance sheet is as follows: Cash $ 30,000 Liabilities $ 119,000 Accounts receivable 122,000 March, capital 42,000 Inventory 99,000 April, capital 94,000 Land, building,...
March, April, and May have been in partnership for a number of years. The partners allocate...
March, April, and May have been in partnership for a number of years. The partners allocate all profits and losses on a 4:2:2 basis, respectively. Recently, each partner has become personally insolvent and, thus, the partners have decided to liquidate the business in hopes of remedying their personal financial problems. As of September 1, the partnership’s balance sheet is as follows: Cash $ 17,000 Liabilities $ 53,000 Accounts receivable 87,000 March, capital 34,000 Inventory 86,000 April, capital 81,000 Land, building,...
March, April, and May have been in partnership for a number of years. The partners allocate...
March, April, and May have been in partnership for a number of years. The partners allocate all profits and losses on a 4:2:2 basis, respectively. Recently, each partner has become personally insolvent and, thus, the partners have decided to liquidate the business in hopes of remedying their personal financial problems. As of September 1, the partnership’s balance sheet is as follows: Cash $ 25,000 Liabilities $ 84,000 Accounts receivable 112,000 March, capital 56,000 Inventory 94,000 April, capital 89,000 Land, building,...
March, April, and May have been in partnership for a number of years. The partners allocate...
March, April, and May have been in partnership for a number of years. The partners allocate all profits and losses on a 3:3:2 basis, respectively. Recently, each partner has become personally insolvent and, thus, the partners have decided to liquidate the business in hopes of remedying their personal financial problems. As of September 1, the partnership’s balance sheet is as follows:   Cash $ 14,000      Liabilities $ 58,000      Accounts receivable 87,000      March, capital 28,000      Inventory 80,000   ...
March, April, and May have been in partnership for a number of years. The partners allocate...
March, April, and May have been in partnership for a number of years. The partners allocate all profits and losses on a 2:3:1 basis, respectively. Recently, each partner has become personally insolvent and, thus, the partners have decided to liquidate the business in hopes of remedying their personal financial problems. As of September 1, the partnership’s balance sheet is as follows: Cash $ 18,000 Liabilities $ 66,000 Accounts receivable 98,000 March, capital 32,000 Inventory 75,000 April, capital 82,000 Land, building,...
March, April, and May have been in partnership for a number of years. The partners allocate...
March, April, and May have been in partnership for a number of years. The partners allocate all profits and losses on a 2:3:1 basis, respectively. Recently, each partner has become personally insolvent and, thus, the partners have decided to liquidate the business in hopes of remedying their personal financial problems. As of September 1, the partnership’s balance sheet is as follows: Cash $ 21,000 Liabilities $ 75,000 Accounts receivable 104,000 March, capital 35,000 Inventory 81,000 April, capital 85,000 Land, building,...
March, April, and May have been in partnership for a number of years. The partners allocate...
March, April, and May have been in partnership for a number of years. The partners allocate all profits and losses on a 4:2:2 basis, respectively. Recently, each partner has become personally insolvent and, thus, the partners have decided to liquidate the business in hopes of remedying their personal financial problems. As of September 1, the partnership’s balance sheet is as follows: Cash $ 27,000 Liabilities $ 91,000 Accounts receivable 116,000 March, capital 58,000 Inventory 96,000 April, capital 91,000 Land, building,...
March, April, and May have been in partnership for a number of years. The partners allocate...
March, April, and May have been in partnership for a number of years. The partners allocate all profits and losses on a 4:2:2 basis, respectively. Recently, each partner has become personally insolvent and, thus, the partners have decided to liquidate the business in hopes of remedying their personal financial problems. As of September 1, the partnership’s balance sheet is as follows: Cash $ 35,000 Liabilities $ 131,000 Accounts receivable 132,000 March, capital 60,000 Inventory 122,000 April, capital 99,000 Land, building,...
The Trump, Clinton, Mueller Partnership has been around for several years The partners share profits equally...
The Trump, Clinton, Mueller Partnership has been around for several years The partners share profits equally but Trump and Clinton take 40% of losses while Mueller only take 20% of losses.   Mueller receives $30,000 in salary and all partners get 10% return on their beginning of the year capital accounts. Each year Trump makes a withdrawl of $6000 for hair care products and Clinton makes a withdrawl of $15,000 for new pant suits. At the beginning of 2017 Trump, Clinton...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT