Exam 15: Partnerships: Termination and Liquidation

What financial schedule would be prepared for a partnership that has begun liquidation but has not yet completed the process? What is the purpose of this schedule?

A local partnership was considering the possibility of liquidation since one of the partners (Ding)was insolvent.Capital balances at that time were as follows.Profits and losses were divided on a 4:2:2:2 basis,respectively. Ding's creditors filed a $25,000 claim against the partnership's assets.At that time,the partnership held assets reported at $360,000 and liabilities of $120,000. If the assets could be sold for $228,000,what is the minimum amount that Laurel's creditors would have received?

A local partnership has assets of cash of $5,000 and a building worth $80,000.All liabilities have been paid and the partners are all insolvent.The partners capital accounts are as follows Harry $40,000,Landers $30,000 and Waters 15,000.The partners share profits and losses 4:4:2.If the building is sold for $50,000,how much cash will Waters receive in the final settlement?

Which of the following will not result in the dissolution of a partnership? 1)Partners are incompatible and choose to cease operations. 2)Partners realize that the profit figures have failed to reach projected levels. 3)Retirement of a partner. 4)Death of a partner.

What accounting transactions are not recorded by an accountant during liquidation?

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?

A local partnership has assets of cash of $13,000 and land worth $70,000.All liabilities have been paid and the partners are all insolvent.The partners capital accounts are as follows Roberts,$50,000,Ferry,$30,000 and Mones,$3,000.The partners share profits and losses 5:3:2.If the land is sold for $45,000,how much cash will Roberts receive in the final settlement?

Which statement below is correct?

A local partnership has assets of cash of $13,000 and land worth $70,000.All liabilities have been paid and the partners are all insolvent.The partners capital accounts are as follows Roberts,$50,000,Ferry,$30,000 and Mones 3,000.The partners share profits and losses 5:3:2.If the land is sold for $45,000,how much cash will Mones receive in the final settlement?

Xygote,Yen,and Zen were partners who were liquidating their partnership.Each partner was insolvent.All assets had been liquidated and all liabilities had been paid.How should any remaining cash have been distributed to the partners?

What is the purpose of a marshaling of assets? What are the provisions that must be complied with in a marshaling of assets?

Which statement below is false?

Harding,Jones,and Sandy is in the process of liquidating and the partners have the following capital balances;20,000,22,000,and (10,000)respectively.The partners share all profits and losses 50%,35%,and 15%,respectively.Sandy has indicated that the (10,000)deficit will be covered with a forthcoming contribution.The remaining partners have requested to receive $18,382 in cash that is available.How should this cash be distributed?

REFERENCE: Ref.15_01 As of January 1,2007,the partnership of Canton,Yulls,and Garr had the following account balances and percentages for the sharing of profits and losses: The partnership incurred losses in recent years and decided to liquidate.The liquidation expenses were expected to be $10,000. -1)How much cash should have been distributed safely to partners at this time? 2)How much cash should each partner have received at this time?

A local partnership was considering the possibility of liquidation since one of the partners (Ding)was insolvent.Capital balances at that time were as follows.Profits and losses were divided on a 4:2:2:2 basis,respectively. Ding's creditors filed a $25,000 claim against the partnership's assets.At that time,the partnership held assets reported at $360,000 and liabilities of $120,000. If the assets could be sold for $228,000,what is the minimum amount that Ezzard's creditors would have received?

What is the purpose of a predistribution plan?

REFERENCE: Ref.15_05 The partners of Donald,Chief & Berry LLP decided to liquidate on August 1,2009.The balance sheet of the partnership is as follows,with the income-sharing ratio of 25%,45%,30% respectively. The disposal of other assets with a carrying amount of $200,000 realized $140,000,and all available cash was distributed. -Prepare the journal entry for Donald,Chief & Berry LLP on August 1,2009,to record payment of liabilities.

Which item is not shown on the schedule of partnership liquidation?

What events or circumstances might force the termination of a partnership and liquidation of its assets?

A partnership held three assets: Cash,$13,000;Land,$45,000;and a Building,$65,000.The partners anticipated that expenses required to liquidate their partnership would amount to $6,000.Capital 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: If a preliminary distribution of cash was to be made,how much would each of the partners have received?