50.1K

Verified Solution

Link Copied!

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)

Answer & Explanation Solved by verified expert

See Answer