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week 8 section 1

A partnership has the following account balances: Cash, $78,000; Other Assets, $580,000; Liabilities, $256,000; Nixon (50 percent of profits and losses), $190,000; Cleveland (30 percent), $130,000; Pierce (20 percent), $82,000. The company liquidates, and $17,500 becomes available to the partners. Who gets the $17.500? Determine how much of this amount should be distributed to each partner. (Do not round intermediate calculations)

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	Nixon Cleveland Pierce Safe payments

week 8 section 4

The partnership of Winn, Xie, Yang, and Zed has the following balance sheet:

cash 51,000

other assets 306,000

liabilites 65,000

winn capital (50% profit and losses) 81,000

xie, capital (30%) 99,000

yanng capital (10%) 61,000

zad capital (10%) 51,000

Zed is personally insolvent, and one of his creditors is considering suing the partnership for the $26,000 that is currently owed. The creditor realizes that this litigation could result in partnership liquidation and does not wish to force such an extreme action unless Zed is reasonably sure of obtaining at least $26,000 from the liquidation. Determine the amount for which the partnership must sell the other assets to ensure that Zed receives $26,000 from the liquidation. Liquidation expenses are expected to be $36,000. (Do not round intermediate calculations)

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	Minimum amount

5. The partnership of Frick Wilson

The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its business property. A balance sheet drawn up at this time shows the following account balances:

Cash 66,000

Noncash assets 243,000

Liabilities 43,000

Frick, capital (60%) 144,000

Wilson, capital (20%) 39,000

total assets 309,000 total liabilities and capital 309,000

Part A: Prepare a predistribution plan for this partnership.

Part B: The following transactions occur in liquidating this business:

1. Distributed cash based on safe balances immediately to the partners. Liquidation expenses of $9,000 are estimated as a basis for this computation.

2. Sold noncash assets with a book value of $102,000 for $66,000.

3. Paid all liabilities

4. Distributed cash based on safe capital balances again

5. Sold remaining noncash assets for $55,000

6. Paid actual liquidation expenses of 7000 only

7. Distributed remaining cash to the partners and closed the financial records of the business permanently.

Produce a final statement of liquidation for this partnership using the predistribution plan to determine payments of cash to partners based on safe capital balances.

Part C: Prepare journal entries to record the liquidation transactions reflected in the final statement of liquidation.

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A.

prepare a predistribution plan for this partnership

	Frick, Capital Wilson, Capital Clarke, Capital Beginning balances Loss Step one balances 0 0 0 Loss Step two balances 0 0 0 Loss Final balances 0 0 0

B. produce a final statement of liquidation for this partnership using the predistribution plan to determine payments of cash to partners based on safe capital balances. (Do not round intermediate calculations.)

	FRICK, WILSON, AND CLARKE Statement of Partnership Liquidation Final Balances Cash Noncash Assets Liabilities Frick, Capital (60%) Wilson, Capital (20%) Clarke, Capital (20%) Beginning balances $66,000 $243,000 $43,000 $144,000 $39,000 $83,000 Distribution Updated balances $66,000 $243,000 $43,000 $144,000 $39,000 $83,000 Noncash assets sold Updated balances $66,000 $243,000 $43,000 $144,000 $39,000 $83,000 Liabilities paid Updated balances $66,000 $243,000 $43,000 $144,000 $39,000 $83,000 First (remainder of first distribution) Next Next Updated balances $66,000 $243,000 $43,000 $144,000 $39,000 $83,000 Noncash assets sold Updated balances $66,000 $243,000 $43,000 $144,000 $39,000 $83,000 Liquidation expenses paid Updated balances $66,000 $243,000 $43,000 $144,000 $39,000 $83,000 Final distribution based on ending capital account balances Ending balance $66,000 $243,000 $43,000 $144,000 $39,000 $83,000

Required A

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