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Kendra, Cogley, and Mei share income and loss in a 3:2:1 ratio (in ratio form: Kendra, 3/6; Cogley, 2/6; and Mei, 1/6). The partners have decided to liquidate their partnership. On the day of liquidation, their balance sheet appears as follows. Balance Sheet Assets Liabilities Cash $ 103,600 Accounts payable $ 252,500 Inventory 536,400 Equity Kendra, Capital 77,500 Cogley, Capital 174,375 Mei, Capital 135,625 Total assets $ 640,000 Total liabilities and equity $ 640,000

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. Enter losses and partner deficits, if any, as negative amounts.) 1. Inventory is sold for $610,200. 2. Inventory is sold for $469,800. 3. Inventory is sold for $334,200 and partners with deficits pay their deficits in cash. 4. Inventory is sold for $276,600 and partners with deficits do not pay their deficits.

• 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 $469,800.

	Step 1) Determination of Gain (Loss) Proceeds from the sale of inventory $469,800 Inventory cost Step 2) Allocation of the gain (Loss) to the Partners. KENDRA COGLEY MEI Total Initial capital balances $77,500 $174,375 $135,625 $387,500 Allocation of gains (losses) 0 Capital balances after gains (losses) $77,500 $174,375 $135,625 $387,50

Complete the schedule allocating the gain or loss on the sale of inventory is $334,200 and partners with deficits pay their deficits in cash.

	Step 1) Determination of Gain (Loss) Proceeds from the sale of inventory $334,200 Inventory cost Step 2) Allocation of the Gain (Loss) to the Partners. KENDRA COGLEY MEI Total Initial capital balances $77,500 $174,375 $135,625 $387,500 Allocation of gains (losses) 0 Capital balances after gains (losses) $77,500 $174,375 $135,625 $387,500

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