Exam 15: Partnerships: Termination and Liquidation

A partnership held three assets: Cash, $13,000; Land, $45,000; and a Building, $65,000.There were no recorded liabilities.The partners anticipated that expenses required to liquidate their partnership would amount to $6,000.Capital account balances were as follows: King, Capital: $32,700 Murphy, Capital: 36,400 Madison, Capital: 26,000 Pond, Capital: 27,900 The partners shared profits and losses 30:30:20:20, respectively. Required: Prepare a proposed schedule of liquidation, showing how cash could be safely distributed to the partners at this time.

A partnership had the following account balances: Cash, $91,000; Other Assets, $702,000; Liabilities, $338,000; Polk, Capital (50% of profits and losses), $221,000; Garfield, Capital (30%), $143,000; Arthur, Capital (20%), $91,000.The company liquidated and $10,400 became available to the partners. Required: Who would have received the $10,400?

For what amount would noncash assets need to be sold to generate enough cash in order that at least one partner would receive some cash upon liquidation?

Gonda, Herron, and Morse is considering possible liquidation because partner Morse is personally insolvent.The partners have the following capital account balances: $60,000, $70,000, and $40,000, respectively, and share profits and losses 30%, 45%, and 25%, respectively.The partnership has $200,000 in noncash assets that can be sold for $150,000.The partnership has $10,000 cash on hand, and $40,000 in liabilities.What is the minimum that partner Morse's creditors would receive if they have filed a claim for $50,000?

Describe the content of a journal entry to record a gain or loss resulting from the liquidation of a partnership asset for cash.

Harding, Jones, and Sandy, a partnership, is in the process of liquidating.The partners have the following capital account balances; $24,000, $24,000, and ($9,000) respectively.The partners share all profits and losses 16%, 48%, and 36%, respectively.Sandy has indicated that the ($9,000) deficit will be covered with a forthcoming contribution.The remaining partners have requested an immediate distribution of $20,000 in cash that is available.How should this cash be distributed?

If the land is sold for $450,000, how much cash will Mones receive in the final settlement?

Which one of the following statements is true for a predistribution plan?

What is the purpose of a predistribution plan?

If the building is sold for $50,000 and there are no liquidation expenses what amount should Harry receive in the final settlement?

The partnership of Rayne, Marin, and Fulton was being liquidated by the partners.Rayne was insolvent and did not have enough assets to pay all his personal creditors.Under what conditions might Rayne's personal creditors have claimed some of the partnership assets?

Determine the cash to be retained and prepare a schedule to distribute $35,000 cash to the partners.

What is a safe cash payment?

Which of the following could result in the termination and liquidation of a partnership? 1) Partners are incompatible and choose to cease operations. 2) There are excessive losses that are expected to continue. 3) Retirement of a partner.

When a partnership is insolvent and a partner has a deficit capital account balance, that partner is legally required to:

Prepare a schedule to calculate the safe payments to be made to the partners at the end of January.

For what amount would the noncash assets need to be sold in order for Quincy to receive some cash from the liquidation?

What is the preferred method of resolving a partner's deficit balance, according to the Uniform Partnership Act?

Before liquidating any assets, the partners determined the amount of cash for safe payments and distributed it.The noncash assets were then sold for $120,000.The liquidation expenses of $5,000 were paid prior to the sale of noncashassets.How would the $120,000 be distributed to the partners? (Hint: Either a predistribution plan or a schedule of safe capital balances would be appropriate for solving this item.)

If the assets could be sold, for $228,000 and there are no liquidation expenses what is the amount that Tillman would receive from the liquidation?