$ 76,000 303,000 Bauer, capital (60%) Ohtani, capital (20%) Souza, capital (20%) The partnership of Bauer,...

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$ 76,000 303,000 Bauer, capital (60%) Ohtani, capital (20%) Souza, capital (20%) The partnership of Bauer, Ohtani, and Souza 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 Noncash assets Liabilities $ 44,000 183,000 49,000 103,000 Total assets $ 379,000 Total liabilities and capital $ 379,000 Required: Part A Prepare a predistribution plan for this partnership. Part B The following transactions occur in liquidating this business: 1. Distributed safe payments of cash 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 $122,000 for $76,000. 3. Paid all liabilities. 4. Distributed safe payments of cash again. 5. Sold remaining noncash assets for $65,000. 6. Paid actual liquidation expenses of $7,000 only. 7. Distributed remaining cash to the partners and closed the financial records of the business permanently. Prepare a final statement of liquidation for this partnership using the predistribution plan to determine payments of cash to partners. Part C Prepare journal entries to record the liquidation transactions reflected in the final statement of liquidation. Bauer, Capital Ohtani, Capital Souza, Capital Beginning balances $ 183,000 $49,000 Assumed loss of Schedule 1 Step one balances 183,000 49,000 0 Assumed loss of Schedule 2 0 Step two balances 183,000 49,000 0 Assumed loss of Schedule 3 0 Step three balances 183,000 49,000 0 BAUER, OHTANI, AND SOUZA Statement of Partnership Liquidation Final Balances Beginning balances Distribution Updated balances Noncash assets sold Updated balances Liabilities paid $ 76,000 $303,000 $ 44,000 $ Cash Noncash Assets Liabilities Ohtani, Souza, Capital (20%) Bauer, Capital Capital (60%) (20%) 183,000 $49,000 $ 103,000 $ 76,000 $ 303,000 $44,000 $ $ 76,000 $ 303,000 $ 44,000 $ 183,000 $ 49,000 $ 103,000 183,000 $ 49,000 $ 103,000 Updated balances $ 76,000 $303,000 $44,000 $ 183,000 $ 49,000 $ 103,000 First (remainder of first distribution) Next Next Updated balances $ 76,000 $303,000 $44,000 $ Noncash assets sold Updated balances $ 76,000 $303,000 $44,000 $ Liquidation expenses paid Updated balances $ 76,000 $303,000 $ 44,000 $ Final distribution based on ending capital account balances Ending balance $ 76,000 $303,000 $44,000 $ 183,000 $ 49,000 $ 103,000 183,000 $ 49,000 $ 103,000 183,000 $ 49,000 $ 103,000 183,000 $ 49,000 $ 103,000 $ 76,000 303,000 Bauer, capital (60%) Ohtani, capital (20%) Souza, capital (20%) The partnership of Bauer, Ohtani, and Souza 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 Noncash assets Liabilities $ 44,000 183,000 49,000 103,000 Total assets $ 379,000 Total liabilities and capital $ 379,000 Required: Part A Prepare a predistribution plan for this partnership. Part B The following transactions occur in liquidating this business: 1. Distributed safe payments of cash 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 $122,000 for $76,000. 3. Paid all liabilities. 4. Distributed safe payments of cash again. 5. Sold remaining noncash assets for $65,000. 6. Paid actual liquidation expenses of $7,000 only. 7. Distributed remaining cash to the partners and closed the financial records of the business permanently. Prepare a final statement of liquidation for this partnership using the predistribution plan to determine payments of cash to partners. Part C Prepare journal entries to record the liquidation transactions reflected in the final statement of liquidation. Bauer, Capital Ohtani, Capital Souza, Capital Beginning balances $ 183,000 $49,000 Assumed loss of Schedule 1 Step one balances 183,000 49,000 0 Assumed loss of Schedule 2 0 Step two balances 183,000 49,000 0 Assumed loss of Schedule 3 0 Step three balances 183,000 49,000 0 BAUER, OHTANI, AND SOUZA Statement of Partnership Liquidation Final Balances Beginning balances Distribution Updated balances Noncash assets sold Updated balances Liabilities paid $ 76,000 $303,000 $ 44,000 $ Cash Noncash Assets Liabilities Ohtani, Souza, Capital (20%) Bauer, Capital Capital (60%) (20%) 183,000 $49,000 $ 103,000 $ 76,000 $ 303,000 $44,000 $ $ 76,000 $ 303,000 $ 44,000 $ 183,000 $ 49,000 $ 103,000 183,000 $ 49,000 $ 103,000 Updated balances $ 76,000 $303,000 $44,000 $ 183,000 $ 49,000 $ 103,000 First (remainder of first distribution) Next Next Updated balances $ 76,000 $303,000 $44,000 $ Noncash assets sold Updated balances $ 76,000 $303,000 $44,000 $ Liquidation expenses paid Updated balances $ 76,000 $303,000 $ 44,000 $ Final distribution based on ending capital account balances Ending balance $ 76,000 $303,000 $44,000 $ 183,000 $ 49,000 $ 103,000 183,000 $ 49,000 $ 103,000 183,000 $ 49,000 $ 103,000 183,000 $ 49,000 $ 103,000

Answer rating: 100% (QA)

Part A Predistribution plan Bauer 60 60 x 379000 44000 9000 213600 Ohtani 20 20 x 379000 44000 9000 ... View the full answer