Lui, Montavo, and Johnson plan to liquidate their Premium Pool and Spa business. They have always shared
Question:
Lui, Montavo, and Johnson plan to liquidate their Premium Pool and Spa business. They have always shared profit and losses in a :: ratio, and on the day of the liquidation their balance sheet appeared as follows:
Premium Pool and Spa
Balance Sheet
June
Assets
Cash $
Machinery $
Less: Accumulated depreciation
Total assets $
Liabilities
Accounts payable $
Equity
Jim Lui $
Kent Montavo, capital
Dave Johnson, capital
Total equity
Total liabilities and equity $
Required:
Under the assumption that the machinery is sold and the cash is distributed to the proper parties on June complete the schedule provided below. Show the sale, the gain or loss allocation, and the distribution of the cash in each of the following unrelated cases:
a The machinery is sold for $Negative answers should be indicated by a minus sign.
b The machinery is sold for $Negative answers should be indicated by a minus sign.
c The machinery is sold for $ and any partners with resulting deficits can and do pay in the amount of their deficits. Negative answers should be indicated by a minus sign.
d The machinery is sold for $ and the partners have no assets other than those invested in the business. Negative answers should be indicated by a minus sign.
Prepare the entry to record the final distribution of cash assuming the machinery is sold for $
Fundamental Accounting Principles Volume II
ISBN: 978-1260305838
16th Canadian edition
Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann