Does somebody can help me with this problem?

profilehecamo

 

 

2. The partnership of Douglas, Krismerry, and Frank has the following trial balance on December 31, 2013:

 

 

 

                                                   Debit                              Credit

 

 Cash                                          25,000

 

 Accounts Receivable (net)       35,000

 

 Inventory                                  40,000

 

 Plant and Equipment (net)      220,000

 

 Accounts Payable                                                          45,000

 

 Douglas,    Capital                                                       125,000

 

 Krismerry, Capital                                                       l95,000

 

 Frank,        Capital                                                       l55,000

 

                                                320,000                         320,000        

 

 

 The partners share profits and losses as follows: Douglas, 50 percent; Krismerry, 30 percent; and Frank, 20 percent. The partners have decided to liquidate their partnership by installments. Cash is distributed to the partners at the end of each month. A summary of the liquidation transactions follows:

 

 January

a. $30,000 is collected on accounts receivable; balance is uncollectible.

b. $25,000 received for the entire inventory.

c. $1,500 liquidation expense paid.

d. $45,000 paid to creditors.

e. $10,000 cash retained in the business at the end of the month.

 

February

f. $2,000 in liquidation expenses paid.

g. As part payment of his capital, Frank accepted an item of special equipment that he developed, which had a book value of $10,000. The partners agreed that a value of $14,000 should be placed on this item for liquidation purposes.

h. $5,000 cash retained in the business at the end of the month.

 

March

i. $155,000 received on sale of remaining plant and equipment.

j. $1,000 liquidation expenses paid. No cash retained in the business.

 

Required: Prepare a statement of partnership realization and liquidation with supporting schedules of safe payments to partners.

 

 

 

    • 10 years ago
    • 20
    Answer(1)

    Purchase the answer to view it

    blurred-text
    NOT RATED
    • attachment
      partnership.xlsx