PROBLEM #2 ( 10 Marks ) The partners of the MKR Partnership agree to liquidate...
80.2K
Verified Solution
Link Copied!
Question
Accounting
PROBLEM #2 ( 10 Marks )
The partners of the MKR Partnership agree to liquidate their partnership on December 31, 2020. At that point, the accounting records show the following balances:
Account Debit Credit
Cash $29,000
Notes Payable $15,000
Accounts Receivable 21,000
Accounts Payable 30,000
Allowance for Doubtful Accounts 2,000
Wages Payable 4,000
Merchandise Inventory 36,000
M. Samuels, Capital 25,000
Equipment 18,000
K. Roswell, Capital 20,000
Accumulated Depreciation-Equipment 7,000
R. Simpson, Capital 1,000
Total $104,000 $104,000
The partners share profits and losses in a 6:3:1 ratio for Samuels, Roswell, and Simpson, respectively. During the process of liquidation, the following transactions
were completed in the below sequence:
1. A total of $50,000 cash was received from selling the non-cash assets.
2. Allocate any gain or loss from the sale to the partners.
3. All liabilities were paid in full.
4. Simpson paid his capital deficiency.
5. The remaining cash was paid to the partners.
Instructions:
Prepare the journal entries to record the above transactions related to the liquidation of the partnership.
Accounts Debit Credit Date
PROBLEM #2 ( 10 Marks )
The partners of the MKR Partnership agree to liquidate their partnership on December 31, 2020. At that point, the accounting records show the following balances:
Account Debit Credit
Cash $29,000
Notes Payable $15,000
Accounts Receivable 21,000
Accounts Payable 30,000
Allowance for Doubtful Accounts 2,000
Wages Payable 4,000
Merchandise Inventory 36,000
M. Samuels, Capital 25,000
Equipment 18,000
K. Roswell, Capital 20,000
Accumulated Depreciation-Equipment 7,000
R. Simpson, Capital 1,000
Total $104,000 $104,000
The partners share profits and losses in a 6:3:1 ratio for Samuels, Roswell, and Simpson, respectively. During the process of liquidation, the following transactions
were completed in the below sequence:
1. A total of $50,000 cash was received from selling the non-cash assets.
2. Allocate any gain or loss from the sale to the partners.
3. All liabilities were paid in full.
4. Simpson paid his capital deficiency.
5. The remaining cash was paid to the partners.
Instructions:
Prepare the journal entries to record the above transactions related to the liquidation of the partnership.
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
- Unlimited Question Access with detailed Answers
- Zin AI - 3 Million Words
- 10 Dall-E 3 Images
- 20 Plot Generations
- Conversation with Dialogue Memory
- No Ads, Ever!
- Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.