The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its...
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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 Noncash assets Total assets $ 66,000 231,000 $297,000 Liabilities Frick, capital (60%) Wilson, capital (20%) Clarke, capital (20%) Total liabilities and capital Part A Prepare a predistribution plan for this partnership. Part B The following transactions occur in liquidating this business: $ 46,000 135,000 37,000 79,000 $297,000 1. Distributed safe payments of cash immediately to the partners. Liquidation expenses of $10,000 are estimated as a basis for this computation. 2. Sold noncash assets with a book value of $98,000 for $66,000. 3. Paid all liabilities. 4. Distributed safe payments of cash again. 5. Sold remaining noncash assets for $53,000. 6. Paid actual liquidation expenses of $8,000 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. 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 Noncash assets Total assets $ 66,000 231,000 $297,000 Liabilities Frick, capital (60%) Wilson, capital (20%) Clarke, capital (20%) Total liabilities and capital Part A Prepare a predistribution plan for this partnership. Part B The following transactions occur in liquidating this business: $ 46,000 135,000 37,000 79,000 $297,000 1. Distributed safe payments of cash immediately to the partners. Liquidation expenses of $10,000 are estimated as a basis for this computation. 2. Sold noncash assets with a book value of $98,000 for $66,000. 3. Paid all liabilities. 4. Distributed safe payments of cash again. 5. Sold remaining noncash assets for $53,000. 6. Paid actual liquidation expenses of $8,000 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.
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Related Book For
Advanced Accounting
ISBN: 978-1259444951
13th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupni
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