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Please solve part 5 to 8 Kendra, Cogley, and Mei share income and loss in a...

Please solve part 5 to 8

Kendra, Cogley, and Mei share income and loss in a 3:2:1 ratio. The partners have decided to liquidate their partnership. On the day of liquidation their balance sheet appears as follows.  

KENDRA, COGLEY, AND MEI
Balance Sheet
May 31
Assets Liabilities and Equity
Cash $ 72,200 Accounts payable $ 251,000
Inventory 550,800 Kendra, Capital 74,400
Cogley, Capital 167,400
Mei, Capital 130,200
Total assets $ 623,000 Total liabilities and equity $ 623,000

Required:
For each of the following scenarios, complete the schedule allocating the gain or loss on the sale of inventory. Prepare journal entries to record the below transactions. (Do not round intermediate calculations. Amounts to be deducted or Losses should be entered with a minus sign. Round your final answers to the nearest whole dollar.)
(1) Inventory is sold for $604,200.
(2) Inventory is sold for $475,200.
(3) Inventory is sold for $301,800 and any partners with capital deficits pay in the amount of their deficits.
(4) Inventory is sold for $282,000 and the partners have no assets other than those invested in the partnership.

5) Complete the schedule allocating the gain or loss on the sale of inventory is $301,800 and any partners with capital deficits pay in the amount of their deficits.

Step 1) Determination of Gain (Loss)
Proceeds from the sale of inventory $301,800
Inventory cost
Step 2) Allocation of the Gain (Loss) to the Partners.
KENDRA COGLEY MEI Total
Initial capital balances $74,400 $167,400 $130,200 $372,000
Allocation of gains (losses)
Capital balances after gains (losses)

6) a) Record the sale of inventory.

b) Allocate the gain(loss) on the sale of inventory to the partners.

c) The partner(s) with deficit balances repay the amount of their deficit(s).

d) Record the payment of the liabilities.

e) Record the disbursement of the remaining cash to the partners.

7) Complete the schedule allocating the gain or loss on the sale of inventory $282,000 and the partners have no assets other than those invested in the partnership.

Step 1) Determination of gain (loss)
Proceeds from the sale of inventory $282,000
Inventory Cost
Step 2) Allocation of the gain (loss) to the partners and distribution of deficit(s)
KENDRA COGLEY MEI Total
Initial capital balances $74,400 $167,400 $130,200 $372,000
Allocation of gains (losses)
Capital balances after gains (losses)
Allocation of deficit balance
Capital balances after deficit allocation

8) a) Record the sale of inventory for $282,000.

b) Record the allocation of the gain or loss on the sale of inventory to the partners.

c) Assuming that the partners have no assets other than those invested, allocate any partner(s) deficit balances to the remaining partners.

d) Record the payment of the liabilities.

e) Record the disbursement of the remaining cash to the partner(s).

Solutions

Expert Solution

Schedule allocating gain or loss is as follows:
Sold at $604200 Sold at $475200 Sold at $301800 Sold at $282000
Particulars Amount ($) Amount ($) Amount ($) Amount ($)
Sale of inventory $604,200 $475,200 $301,800 $282,000
Cost of Inventory $550,800 $550,800 $550,800 $550,800
Gain /(Loss) on sale of inventory $53,400 -$75,600 -$249,000 -$268,800
Case-I
Kendra Cogley Mei
Opening capital balance $74,400 $167,400 $130,200 $372,000
Add: gain in ratio 3:2:1 $26,700 $17,800 $8,900 $53,400
Adjusted Capital balances $101,100 $185,200 $139,100 $425,400
Journal entries:
Date Particulars L.F Amount ($) Amount ($)
a Cash $604,200
Inventory $550,800
Gain on sale of inventory $53,400
(For inventory sold)
b. Gain on sale of inventory $53,400
Kendra Capital $26,700
Cogley capital $17,800
Mei capital $8,900
(For gain distributed)
c. Accounts payable $251,000
cash $251,000
(for accounts payable settled)
d. Kendra Capital $101,100
Cogley capital $185,200
Mei capital $139,100
cash (72200+604200-251000) $425,400
(For capital balances cleared)
Case-2
Kendra Cogley Mei
Opening capital balance $74,400 $167,400 $130,200 $372,000
Less: Loss on sale 3:2:1 $37,800 $25,200 $12,600 $75,600
Adjusted Capital balances $36,600 $142,200 $117,600 $296,400
Journal entries:
Date Particulars L.F Amount ($) Amount ($)
a Cash $475,200
Gain (Loss) on sale of inventory $75,600
Inventory $550,800
(For inventory sold)
b. Kendra Capital $37,800
Cogley capital $25,200
Mei capital $12,600
Gain (Loss) on sale of inventory $75,000
(For Loss distributed)
c. Accounts payable $251,000
cash $251,000
(for accounts payable settled)
d. Kendra Capital $36,600
Cogley capital $142,200
Mei capital $117,600
cash (72200+475200-251000) $296,400
(For capital balances cleared)
Case-3
Kendra Cogley Mei
Opening capital balance $74,400 $167,400 $130,200 $372,000
Less: Loss on sale 3:2:1 $124,500 $83,000 $41,500 $249,000
Adjusted Capital balances -$50,100 $84,400 $88,700 $123,000
Journal entries:
Date Particulars L.F Amount ($) Amount ($)
a Cash $301,800
Gain (Loss) on sale of inventory $249,000
Inventory $550,800
(For inventory sold)
b. Kendra Capital $124,500
Cogley capital $83,000
Mei capital $41,500
Gain (Loss) on sale of inventory $249,000
(For Loss distributed)
c. Cash $50,100
Kendra Capital $50,100
d. Accounts payable $251,000
cash $251,000
(for accounts payable settled)
f. Cogley capital $84,400
Mei capital $88,700
cash (72200+301800+50100-251000) $173,100
(For capital balances cleared)
Case-4
Kendra Cogley Mei
Opening capital balance $74,400 $167,400 $130,200 $372,000
Less: Loss on sale 3:2:1 $134,400 $89,600 $44,800 $268,800
Adjusted Capital balances -$60,000 $77,800 $85,400 $103,200
Loss of Kendra shared by C & N $60,000 -$40,000 -$20,000 $0
Adjusted Capital balances $0 $37,800 $65,400 $103,200
Journal entries:
Date Particulars L.F Amount ($) Amount ($)
a Cash $282,000.00
Gain (Loss) on sale of inventory $268,800.00
Inventory $550,800.00
(For inventory sold)
b. Kendra Capital $134,400.00
Cogley capital $89,600.00
Mei capital $44,800.00
Gain (Loss) on sale of inventory $268,800.00
(For Loss distributed)
c. Cogley's Capital $60,000.00
Meri 's Capital $40,000.00
Kendra's Capital $20,000.00
d. Accounts payable $251,000.00
cash $251,000.00
(for accounts payable settled)
f. Cogley capital $37,800.00
Mei capital $65,400.00
cash (72200+282000+-251000) $103,200.00
(For capital balances cleared)

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