Question
In: Accounting
A partnership is considering possible liquidation because one of the partners (Bell) is personally insolvent. Profits...
A partnership is considering possible liquidation because one of the partners (Bell) is personally insolvent. Profits and losses are divided on a 4:3:2:1 basis, respectively. Capital balances at the current time are
| Bell, capital | $ | 72,500 |
| Hardy, capital | 65,000 | |
| Dennard, capital | 11,000 | |
| Suddath, capital | 89,000 | |
Bell’s creditors have filed a $30,000 claim against the partnership’s assets. The partnership currently holds assets of $390,000 and liabilities of $152,500. If the assets can be sold for $235,000, what is the minimum amount that Bell’s creditors would receive?
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Gonda, Herron, and Morse is considering possible liquidation because partner Morse is personally insolvent. The partners...
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Sales revenue
$
340,000
Interest income
3,300
Long-term capital gains
1,200
...
A partnership has the following balance sheet prior to liquidation (partners’ profit and loss ratios are...
A partnership has the following balance sheet prior to liquidation (partners’ profit and loss ratios are in parentheses):
Cash
$
33,000
Liabilities
$
50,000
Other assets
100,000
Playa, capital (40%)
24,000
Bahia, capital (30%)
29,000
Arco, capital (30%)
30,000
Total
$
133,000
Total
$
133,000
During liquidation, other assets are sold for $80,000, liabilities are paid in full, and $15,000 in liquidation expenses are...
Balqees and Zawan were partners sharing the profits and losses of their partnership firm “ Best...
Balqees and Zawan were partners sharing the profits and losses
of their partnership firm “ Best
traders ” in the ratio of 5:6. As the duo were struggling with
managing the ever increasing
financial needs of their business and hence they decided to admit
Hana in their partnership firm.
Hana, a rich lady was drawn in to induce funds in the cash strapped
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profits, which was...
partnership has three partners, Bell, Casey and Duffy, with capital balances of $50,000, $60,000, and $70,000...
partnership has three partners, Bell, Casey and Duffy, with
capital balances of $50,000, $60,000, and $70,000 respectively. The
partners share income equally. Duffy retires and is paid using the
personal assets of Bell and Casey.
Which statement is true concerning the accounting for this
transaction?
A.
If the total paid to Duffy is more than $70,000, implied
goodwill is recognized.
B.
Bell and Casey are required to pay Duffy equal amounts of
personal assets, as specified in their income-sharing
agreement....
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partners, who share profits and losses on a 60:40 basis,
respectively, wish to retire and have agreed to liquidate the
business. Liquidation expenses are estimated to be $5,000. At the
date the partnership ceases operations, the balance sheet is as
follows:
Cash
$
50,000
Liabilities
$
40,000
Noncash assets
150,000
Alex, capital
90,000
Bess, capital
70,000
Total assets
$
200,000
Total liabilities and capital
$
200,000
Part A: Prepare...
Suppose Sean is withdrawing from the partnership of Sean, Mohid, and Beth. The partners share profits...
Suppose Sean is withdrawing from the partnership of Sean, Mohid,
and Beth. The partners share profits and losses in a 1:2:3 ratio
for Sean, Mohid, and Beth, respectively. After the revaluation of
assets, Sean’s Capital balance is $40,000, and the other partners
agree to pay him $30,000. Mohid and Beth agree to a new
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respectively. Journalize the payment to Sean for his withdrawal
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5 Journalize withdrawal...
Alex and Bess have been in partnership for many years. The partners, who share profits and...
Alex and Bess have been in partnership for many years. The
partners, who share profits and losses on a 60:40 basis,
respectively, wish to retire and have agreed to liquidate the
business. Liquidation expenses are estimated to be $9,500. At the
date the partnership ceases operations, the balance sheet is as
follows:
Cash
$
59,000
Liabilities
$
44,500
Noncash assets
180,000
Alex, capital
108,000
Bess, capital
86,500
Total assets
$
239,000
Total liabilities and capital
$
239,000
Part A: Prepare...
Alex and Bess have been in partnership for many years. The partners, who share profits and...
Alex and Bess have been in partnership for many years. The
partners, who share profits and losses on a 60:40 basis,
respectively, wish to retire and have agreed to liquidate the
business. Liquidation expenses are estimated to be $9,500. At the
date the partnership ceases operations, the balance sheet is as
follows:
Cash
$
71,000
Liabilities
$
61,000
Noncash assets
300,000
Alex, capital
180,000
Bess, capital
130,000
Total assets
$
371,000
Total liabilities and
capital
$
371,000
Part A: Prepare...
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