Question: Hi there, I need some help with the following problem. Thank you! Exercise 2 Worksheet: Partnership Liquidation Schedule Edmonds, Beatty, and Elder decided to dissolve
Hi there, I need some help with the following problem. Thank you!
| Exercise 2 Worksheet: Partnership Liquidation Schedule | |||||||
| Edmonds, Beatty, and Elder decided to dissolve their partnership and liquidate the business. The following balance sheet was created at that time showing current account balances: | |||||||
| Cash | $96,000 | Liabilities | $70,000 | This cell intentionally left blank. | |||
| Noncash assets | $354,000 | Capital Edmonds (60%) | $202,000 | This cell intentionally left blank. | |||
| Building and equipment (net) | $200,000 | Capital Beatty (20%) | $56,000 | This cell intentionally left blank. | |||
| Capital Elder (20%) | $122,000 | This cell intentionally left blank. | |||||
| Total assets | $450,000 | Total Liabilites and Capital | $450,000 | This cell intentionally left blank. | |||
| The transactions listed below occurred during liquidation: Safe capital balances were distributed immediately to the partners. $18,000 in liquidation expenses were estimated as a basis for the computation. Noncash assets, with a $160,000 book value, were sold for $96,000. All liabilities were paid. Safe capital balances were once again distributed. $88,000 in remaining noncash assets were sold. $14,000 in liquidation expenses were paid. Cash remaining was distributed to the partners. Business financial records were closed permanently. Allocate income and prepare a partnership liquidation schedule, using a predistribution plan. Use the spaces below to enter your calculations. | |||||||
| Edmonds, Beatty, and Elder Schedule of Partnership Liquidation Final Balances | |||||||
| Cash | Noncash Assets | Liabilities | Edmonds, Capital (60%) | Beatty, Capital (20%) | Elder, Capital (20%) | ||
| Beginning balances | $96,000 | $354,000 | $70,000 | $202,000 | $56,000 | $122,000 | |
| Distribution of $8,000 (cash in excess of liabilities and estimated liquidation expenses) in accordance with predistribution plan Schedule 1 | |||||||
| Updated balances | |||||||
| Noncash assets sold | |||||||
| Updated balances | |||||||
| All liabilities are paid | |||||||
| Updated balances | |||||||
| Distribution of $96,000 (cash in excess of liabilities and estimated liquidation expenses) in accordance with predistribution plan Schedule 1 | |||||||
| First distribution | |||||||
| Next distribution | |||||||
| Next distribution | |||||||
| Updated balances | |||||||
| Noncash assets sold | |||||||
| Updated balances | |||||||
| Paid liquidation expenses | |||||||
| Updated balances | |||||||
| Final distribution based on ending capital account balances | |||||||
| Ending balance | |||||||
| This cell intentionally left blank. | |||||||
| Edmonds, Capital | Beatty, Capital | Elder, Capital | This cell intentionally left blank. | ||||
| Beginning balances | This cell intentionally left blank. | ||||||
| This cell intentionally left blank. | |||||||
| Step 1 balances | This cell intentionally left blank. | ||||||
| This cell intentionally left blank. | |||||||
| Step 2 balances | This cell intentionally left blank. | ||||||
| This cell intentionally left blank. | |||||||
| Predistribution Plan | |||||||
| Schedule 2 | This cell intentionally left blank. | ||||||
| Partner | Capital Balance/ Loss Allocation | Maximum Loss That Can Be Absorbed | This cell intentionally left blank. | ||||
| Edmonds | This cell intentionally left blank. | ||||||
| Beatty | This cell intentionally left blank. | ||||||
| Elder | This cell intentionally left blank. | ||||||
| This cell intentionally left blank. | |||||||
| Schedule 3 | This cell intentionally left blank. | ||||||
| Partner | Capital Balance/ Loss Allocation | Maximum Loss That Can Be Absorbed | This cell intentionally left blank. | ||||
| Edmonds | This cell intentionally left blank. | ||||||
| Elder | This cell intentionally left blank. | ||||||
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