Question

In: Accounting

The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its...

The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its business property. A balance sheet drawn up at this time shows the following account balances:

Cash $ 71,000 Liabilities $ 39,000
Noncash assets 291,000 Frick, capital (60%) 177,000
Wilson, capital (20%) 47,000
Clarke, capital (20%) 99,000
Total assets $ 362,000 Total liabilities and capital $ 362,000

Part A

Prepare a predistribution plan for this partnership.

Part B

The following transactions occur in liquidating this business:

  1. Distributed safe payments of cash immediately to the partners. Liquidation expenses of $9,000 are estimated as a basis for this computation.
  2. Sold noncash assets with a book value of $118,000 for $71,000.
  3. Paid all liabilities.
  4. Distributed safe payments of cash again.
  5. Sold remaining noncash assets for $63,000.
  6. Paid actual liquidation expenses of $7,000 only.
  7. Distributed remaining cash to the partners and closed the financial records of the business permanently.

Produce a final statement of liquidation for this partnership using the predistribution plan to determine payments of cash to partners.

Part C

Prepare journal entries to record the liquidation transactions reflected in the final statement of liquidation.

Solutions

Expert Solution

.


Related Solutions

The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its...
The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its business property. A balance sheet drawn up at this time shows the following account balances: Cash $ 64,000 Liabilities $ 38,000 Noncash assets 261,000 Frick, capital (60%) 156,000 Wilson, capital (20%) 42,000 Clarke, capital (20%) 89,000 Total assets $ 325,000 Total liabilities and capital $ 325,000 Part A Prepare a predistribution plan for this partnership Part B The following transactions occur in liquidating this...
The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its...
The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its business property. A balance sheet drawn up at this time shows the following account balances:   Cash $ 64,000   Liabilities $ 44,000   Noncash assets 225,000   Frick, capital (60%) 132,000   Wilson, capital (20%) 36,000   Clarke, capital (20%) 77,000        Total assets $289,000        Total liabilities and capital $289,000 Part A Prepare a predistribution plan for this partnership Part B The following transactions occur in liquidating this business: 1....
The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its...
The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its business property. A balance sheet drawn up at this time shows the following account balances: Cash $ 67,000 Liabilities $ 41,000 Noncash assets 267,000 Frick, capital (60%) 159,000 Wilson, capital (20%) 43,000 Clarke, capital (20%) 91,000 Total assets $ 334,000 Total liabilities and capital $ 334,000 Part A Prepare a predistribution plan for this partnership Part B The following transactions occur in liquidating this...
The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its...
The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its business property. A balance sheet drawn up at this time shows the following account balances: Cash $ 65,000 Liabilities $ 42,000 Noncash assets 237,000 Frick, capital (60%) 141,000 Wilson, capital (20%) 38,000 Clarke, capital (20%) 81,000 Total assets $ 302,000 Total liabilities and capital $ 302,000 Part A Prepare a predistribution plan for this partnership. Part B The following transactions occur in liquidating this...
The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its...
The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its business property. A balance sheet drawn up at this time shows the following account balances: Cash $ 66,000 Liabilities $ 46,000 Noncash assets 231,000 Frick, capital (60%) 135,000 Wilson, capital (20%) 37,000 Clarke, capital (20%) 79,000 Total assets $ 297,000 Total liabilities and capital $ 297,000 Part A Prepare a predistribution plan for this partnership Part B The following transactions occur in liquidating this...
The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its...
The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its business property. A balance sheet drawn up at this time shows the following account balances: Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $  60,000...
The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its...
The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its business property. A balance sheet drawn up at this time shows the following account balances: Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $  60,000...
The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its...
The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its business property. A balance sheet drawn up at this time shows the following account balances:   Cash $ 51,000   Liabilities $ 37,000   Noncash assets 183,000   Frick, capital (60%) 105,000   Wilson, capital (20%) 29,000   Clarke, capital (20%) 63,000        Total assets $234,000        Total liabilities and capital $234,000 Part A Prepare a predistribution plan for this partnership Part B The following transactions occur in liquidating this business: 1....
The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its...
The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its business property. A balance sheet drawn up at this time shows the following account balances:   Cash $ 64,000   Liabilities $ 44,000   Noncash assets 225,000   Frick, capital (60%) 132,000   Wilson, capital (20%) 36,000   Clarke, capital (20%) 77,000        Total assets $289,000        Total liabilities and capital $289,000 Part A Prepare a predistribution plan for this partnership Frick, Capital Wilson, Capital Clarke, Capital Beginning balances Loss Step one...
The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its...
The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its business property. A balance sheet drawn up at this time shows the following account balances: Cash $ 60,000 Liabilities $ 43,000 Noncash assets 201,000 Frick, capital (60%) 117,000 Wilson, capital (20%) 32,000 Clarke, capital (20%) 69,000 Total assets $ 261,000 Total liabilities and capital $ 261,000 Part A Prepare a predistribution plan for this partnership Part B The following transactions occur in liquidating this...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT