Question

In: Accounting

Kendra, Cogley, and Mei share income and loss in a 3:2:1 ratio. The partners have decided...

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 $ 93,400 Accounts payable $ 247,000
Inventory 537,600 Kendra, Capital 76,800
Cogley, Capital 172,800
Mei, Capital 134,400
Total assets $ 631,000 Total liabilities and equity $ 631,000


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 $624,000.
(2) Inventory is sold for $438,000.

Complete this question by entering your answers in the tabs below.

Required 1 Inventory

Required 1 GJ

Required 2 Inventory

Required 2 GJ

Required 3 Inventory

Required 3 GJ

Required 4 Inventory

Required 4 GJ

Complete the schedule allocating the gain or loss on the sale of inventory is $624,000.
Step 1) Determination of Gain (Loss)
Proceeds from the sale of inventory $624,000
Inventory cost
Step 2) Allocation of the Gain (Loss) to the Partners.
KENDRA COGLEY MEI Total
Initial capital balances $76,800 $172,800 $134,400 $384,000
Allocation of gains (losses) 0
Capital balances after gains (losses) $76,800 $172,800 $134,400 $384,000

Journal entry worksheet

Record the sale of inventory.

Note: Enter debits before credits.
Transaction General Journal Debit Credit
(a)

Journal entry worksheet

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

Note: Enter debits before credits.
Transaction General Journal Debit Credit
(b)

Journal entry worksheet

Record the payment of the liabilities.

Note: Enter debits before credits.
Transaction General Journal Debit Credit
(c)

Journal entry worksheet

Record the disbursement of the remaining cash to the partners.

Note: Enter debits before credits.
Transaction General Journal Debit Credit
(d)

Complete the schedule allocating the gain or loss on the sale of inventory is $438,000.
Step 1) Determination of Gain (Loss)
Proceeds from the sale of inventory $438,000
Inventory cost
Step 2) Allocation of the gain (Loss) to the Partners.
KENDRA COGLEY MEI Total
Initial capital balances $76,800 $172,800 $134,400 $384,000
Allocation of gains (losses) 0
Capital balances after gains (losses) $76,800 $172,800 $134,400 $384,000

Journal entry worksheet

Record the sale of inventory.

Note: Enter debits before credits.
Transaction General Journal Debit Credit
(a)

Journal entry worksheet

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

Note: Enter debits before credits.
Transaction General Journal Debit Credit
(b)

Journal entry worksheet

Record the payment of the liabilities.

Note: Enter debits before credits.
Transaction General Journal Debit Credit
(c)

Journal entry worksheet

Record the disbursement of the remaining cash to the partners.

Note: Enter debits before credits.
Transaction General Journal Debit Credit
(d)

Solutions

Expert Solution

Step 1) Determination of Gain (Loss)
Proceeds from the sale of inventory 6,24,000
Inventory cost 537600
86,400
Step 2) Allocation of the Gain (Loss) to the Partners.
KENDRA COGLEY MEI Total
Initial capital balances 76,800 1,72,800 1,34,400 3,84,000
Allocation of gains (losses) 43200 28800 14400 86400
Capital balances after gains (losses) 1,20,000 2,01,600 1,48,800 4,70,400
Journal entry worksheet
Record the sale of inventory.
Note: Enter debits before credits.
Transaction General Journal Debit Credit
(a) Cash 624000
Inventory 537600
Gain on sale of Inventory 86400
To record the sale of Inventory with gain
Journal entry worksheet
Allocate the gain(loss) on the sale of inventory to the partners.
Note: Enter debits before credits.
Transaction General Journal Debit Credit
(b) Gain on sale of Inventory 86400
Kendra, capital 43200
Cogley, capital 28800
Mei, capital 14400
To record the disbursement of gain on sale of Inventory
Journal entry worksheet
Record the payment of the liabilities.
Note: Enter debits before credits.
Transaction General Journal Debit Credit
(c) Accounts Payable 247000
Cash 247000
To record the payment towards accounts payable
Journal entry worksheet
Record the disbursement of the remaining cash to the partners.
Note: Enter debits before credits.
Transaction General Journal Debit Credit
(d) Kendra, capital 235200
Cogley, capital 156800
Mei, capital 78400
Cash 470400
To record disbursement of remaining cash to partners
Complete the schedule allocating the gain or loss on the sale of inventory is 438,000.
Step 1) Determination of Gain (Loss)
Proceeds from the sale of inventory 4,38,000
Inventory cost 537600
Loss -99,600
Step 2) Allocation of the gain (Loss) to the Partners.
KENDRA COGLEY MEI Total
Initial capital balances 76,800 1,72,800 1,34,400 3,84,000
Allocation of gains (losses) -49800 -33200 -16600 -99,600
Capital balances after gains (losses) 27,000 1,39,600 1,17,800 2,84,400
Journal entry worksheet
Record the sale of inventory.
Note: Enter debits before credits.
Transaction General Journal Debit Credit
(a)
Cash 438000
Loss on sale of Inventory 99600
Inventory 537600
Journal entry worksheet
Allocate the gain(loss) on the sale of inventory to the partners.
Note: Enter debits before credits.
Transaction General Journal Debit Credit
(b) Kendra, capital 49800
Cogley, capital 33200
Mei, capital 16600
Loss on sale of Inventory 99600
Journal entry worksheet
Record the payment of the liabilities.
Note: Enter debits before credits.
Transaction General Journal Debit Credit
(c) Accounts payable 247000
Cash 247000
To record the payment towards the accounts payable
Journal entry worksheet
Record the disbursement of the remaining cash to the partners.
Note: Enter debits before credits.
Transaction General Journal Debit Credit
(d) Kendra, capital 142200
Cogley, capital 94800
Mei, capital 47400
Cash 284400
To record the disbursement of remaining cash to partners

ekkarill92 answered 1 year ago
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