Deck 15: Partnerships: Termination and Liquidation

Question 1

The Keaton,Lewis,and Meador partnership had the following balance sheet just before entering liquidation:
Keaton,Lewis,and Meador share profits and losses in a ratio of 2:4:4.Noncash assets were sold for $180,000.Liquidation expenses were $10,000.
Assume that Keaton was personally insolvent with assets of $8,000 and liabilities of $60,000.Lewis and Meador were both solvent and able to cover deficits in their capital accounts,if any.What amount of cash could Keaton's personal creditors have expected to receive from partnership assets?

A)$30,000.
B)$0.
C)$52,000
D)$26,000
E)$34,000

Answer 1

E

Question 2

The following account balances were available for the Perry,Quincy,and Renquist partnership just before it entered liquidation:
Perry,Quincy,and Renquist had shared profits and losses in a ratio of 2:4:4.Liquidation expenses were expected to be $8,000.
All partners were solvent.What would be the minimum amount for which the noncash assets must have been sold for,in order for Quincy to receive some cash from the liquidation?

A)any amount in excess of $175,000.
B)any amount in excess of $117,000.
C)any amount in excess of $183,000.
D)any amount in excess of $198,667.
E)any amount in excess of $168,333.

Answer 2

C

Question 3

The Henry,Isaac,and Jacobs partnership was about to enter liquidation with the following account balances:
Estimated expenses of liquidation were $5,000.Henry,Isaac,and Jacobs shared profits and losses in a ratio of 2:4:4.
Before liquidating any assets,the partners determined the amount of cash available for safe payments.How should the cash be distributed?

A)in a ratio of 1:2:2 among the partners.
B)$18,333 to Henry and $16,667 to Jacobs.
C)in a ratio of 1:2 between Henry and Jacobs.
D)$15,000 to Henry and $10,000 to Jacobs.
E)$11,364 to Henry and $13,636 to Jacobs.

Answer 3

D

Question 4

The Keaton,Lewis,and Meador partnership had the following balance sheet just before entering liquidation:
Keaton,Lewis,and Meador share profits and losses in a ratio of 2:4:4.Noncash assets were sold for $180,000.Liquidation expenses were $10,000.
Assume that Lewis was personally insolvent and could not contribute any assets to the partnership,while Keaton and Meador were both solvent.What amount of cash would Keaton have received from the distribution of partnership assets?

A)$38,000.
B)$30,000.
C)$24,000.
D)$34,000.
E)$31,600.

Question 5

The Henry,Isaac,and Jacobs partnership was about to enter liquidation with the following account balances:
Estimated expenses of liquidation were $5,000.Henry,Isaac,and Jacobs shared profits and losses in a ratio of 2:4:4.
What amount of cash was available for safe payments,based on the above information?

A)$30,000.
B)$85,000.
C)$25,000.
D)$35,000.
E)$40,000.

Question 6

What is a marshaling of assets?

A)a listing of estimated realizable values of a business's assets
B)the order in which the creditors of a partnership will be paid as partnership assets are liquidated
C)the order in which partners receive cash as partnership assets are liquidated
D)a ranking of claims against an individual
E)the order in which the partnership's assets are liquidated

Question 7

The Abrams,Bartle,and Creighton partnership began the process of liquidation with the following balance sheet:
Abrams,Bartle,and Creighton share profits and losses in a ratio of 3:2:5.Liquidation expenses are expected to be $12,000.
After the liquidation expenses of $12,000 had been paid and the noncash assets sold,Creighton had a deficit of $8,000.For what amount were the noncash assets sold?

A)$170,000.
B)$264,000.
C)$158,000.
D)$146,000.
E)$185,000.

Question 8

The Abrams,Bartle,and Creighton partnership began the process of liquidation with the following balance sheet:
Abrams,Bartle,and Creighton share profits and losses in a ratio of 3:2:5.Liquidation expenses are expected to be $12,000.
If the noncash assets were sold for $234,000,what amount of the loss would have been allocated to Bartle?

A)$43,200.
B)$46,800.
C)$40,000.
D)$42,400.
E)$43,100.

Question 9

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 Ding's creditors would have received?

A)$36,000.
B)$0.
C)$2,500.
D)$38,720.
E)$67,250.

Question 10

The Abrams,Bartle,and Creighton partnership began the process of liquidation with the following balance sheet:
Abrams,Bartle,and Creighton share profits and losses in a ratio of 3:2:5.Liquidation expenses are expected to be $12,000.
The noncash assets were sold for $134,000.Which partner(s)would have had to contribute assets to the partnership to cover a deficit in his or her capital account?

A)Abrams.
B)Bartle.
C)Creighton.
D)Abrams and Creighton.
E)Abrams and Bartle.

Question 11

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.

A)1 and 2 only
B)3 and 4 only
C)1,2,and 3
D)1,2,3,and 4
E)Neither 1,2,3,or 4

Question 12

A local partnership was in the process of liquidating and reported the following capital balances:
Douglass indicated that the $14,000 deficit would be covered by a forthcoming contribution.However,the two remaining partners asked to receive the $31,000 that was then available.
How much of this money should Justice receive?

A)$15,000.
B)$15,467.
C)$17,333.
D)$16,533.
E)$15,867.

Question 13

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 Tillman's creditors would have received?

A)$36,000.
B)$0.
C)$2,500.
D)$38,250.
E)$67,250.

Question 14

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?

A)$36,000.
B)$0.
C)$2,500.
D)$38,250.
E)$67,250.

Question 15

The Henry,Isaac,and Jacobs partnership was about to enter liquidation with the following account balances:
Estimated expenses of liquidation were $5,000.Henry,Isaac,and Jacobs shared profits and losses in a ratio of 2:4:4.
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,and the liquidation expenses of $5,000 were paid.How much of the $120,000 would be distributed to Henry?

A)$23,000.
B)$24,000.
C)$40.000.
D)$27,000.
E)$28,000.

Question 16

Dancey,Reese,Newman,and Jahn were partners who shared profits and losses on a 4:2:2:2 basis,respectively.They were beginning to liquidate their business.At the start of the process,capital balances were as follows:
Which one of the following statements is true?

A)The first available $16,000 would go to Newman.
B)The first available $16,000 would go to Dancey.
C)The first available $8,000 would go to Jahn.
D)The first available $8,000 would go to Reese.
E)The first available $4,000 would go to Jahn.

Question 17

.A local partnership was in the process of liquidating and reported the following capital balances:
Douglass indicated that the $14,000 deficit would be covered by a forthcoming contribution.However,the two remaining partners asked to receive the $31,000 that was then available.
How much of this money should Zobart receive?

A)$15,000.
B)$14,467.
C)$17,333.
D)$15,633.
E)$15,867.

Question 18

.The following account balances were available for the Perry,Quincy,and Renquist partnership just before it entered liquidation:
Perry,Quincy,and Renquist had shared profits and losses in a ratio of 2:4:4.Liquidation expenses were expected to be $8,000.
Assume that Quincy was insolvent and could not contribute assets to cover any deficit in her capital account.For what amount must the noncash assets have been sold,so that Renquist would have received some cash from the liquidation?

A)any amount in excess of $108,000.
B)any amount in excess of $58,000.
C)any amount in excess of $201,600.
D)any amount in excess of $50,000.
E)any amount in excess of $104,000.

Question 19

The partnership of Nurr,Cleamons,and Kelly was insolvent,as was Cleamons personally.The partnership had begun liquidating its assets and Cleamons' capital account had a debit balance.How would the claim of Nurr and Kelly against Cleamons be ranked in comparison with the claims of Cleamons' other creditors?

A)It ranks lower in priority than Cleamons' personal creditors and the creditors of the partnership.
B)It ranks equal in priority with the claims of Cleamons' personal creditors.
C)It ranks lower in priority than Cleamons' personal creditors but higher in priority than the creditors of the partnership.
D)It ranks higher in priority than Cleamons' personal creditors and the creditors of the partnership.
E)It ranks higher in priority than Cleamons' personal creditors but lower in priority than the creditors of the partnership.

Question 20

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)$36,000.
B)$0.
C)$2,500.
D)$38,250.
E)$67,250.

Question 21

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?

A)$0.
B)$3,000.
C)$21,750.
D)$36,250.
E)$50,250.

Question 22

Which statement below is false?

A)The purpose of a marshaling of assets is to protect the interests of various creditors.
B)The marshaling of assets gives order and structure to the settling of claims.
C)When a partner is insolvent,the partner's personal assets should first be used to settle the claims of his or her personal creditors.
D)After a partner's personal creditors are satisfied,any remaining personal assets may be used to pay creditors of the partnership.
E)Partnership assets may be used to pay a partner's personal creditor prior to payment to partnership creditors.

Question 23

Which statement below is correct?

A)If a partner of a liquidating limited liability partnership is unable to pay a capital account deficit,the deficit is absorbed by the other partners in the income-sharing ratio of those partners.
B)Gains and losses from the sale of noncash assets are divided in the ratio of the partners' capital account balances if there is no income-sharing plan in the partnership contract.
C)A loan receivable from a partner is added to the partner's capital account balance in the preparation of a cash distribution plan.
D)Partners may receive cash before creditors receive cash when liquidating a limited liability partnership.
E)All cash payments to partners are made using their income-sharing ratio when liquidating the partnership.

Question 24

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 Harry receive in the final settlement?

A)$5,000.
B)$9,000.
C)$18,000.
D)$28,000.
E)$55,000.

Question 25

Matching
(1. )The schedule of liquidation
(2. )Deficit capital balances
(3. )Marshaling of assets
(4. )Predistribution plan
(A. )A schedule of liquidation should be produced periodically by the accountant to disclose losses and gains that have been incurred,remaining assets and liabilities,and current capital balances.
(B )At the start of a liquidation,this document provides guidance for all payments made to the partners throughout the liquidation
(C. )One or more partners may have a negative capital balance often as a result of losses incurred in disposing of assets.
(D. )Provides an equitable system for distributing assets during liquidation.

Question 26

The marshaling of assets doctrine regulates claims against an individual's assets.The following lists groups interested in potential cash distributions.
(1) )those owed to the creditors of the partnership
(2) )those owed to separate creditors
(3) )those owed to partners by way of contribution
When a partner is bankrupt,which order do claims against their property rank?

A)1,2,3.
B)2,1,3.
C)3,2,1.
D)1,3,2.
E)3,1,2.

Question 27

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

A)Partners never have a deficit balance.
B)The other partners must contribute personal assets to cover the deficit balance.
C)The partnership must sell assets in order to cover the deficit balance.
D)The partner with a deficit balance must contribute personal assets to cover the deficit balance.
E)The partner with a deficit balance contributes personal assets only if those personal assets exceed personal liabilities.

Question 28

What is the role of the accountant during the liquidation process?

Question 29

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?

A)$5,000.
B)$9,000.
C)$18,000.
D)$28,000.
E)$55,000.

Question 30

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

A)Current cash balances.
B)Property owned by the partnership.
C)Liabilities still to be paid.
D)Personal assets of the partners.
E)Current capital balances of the partners.

Question 31

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 of his personal creditors.Under what conditions might Rayne's personal creditors have claimed some of the partnership assets?

Question 32

Under the marshaling of assets doctrine,personal creditors can claim a partner's share of partnership assets under which condition?

A)When payment of all partnership debts is assured.
B)When the insolvent partner has a positive capital balance.
C))When payment of all partnership debts is assured and the insolvent partner has a positive capital balance.
D)When the other partner's agree to the claim..
E)Personal creditors can not claim a partner's share of partnership assets.

Question 33

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

A)The conversion of partnership assets into cash.
B)The allocation of the resulting gains and losses.
C)The payment of liabilities and expenses.
D)Remaining unpaid debts settled,and the distribution of any remaining assets to the partners based on their profit and loss ratio.

Question 34

Which of the following is the proper ranking order of property distributions stipulated by the Uniform Partnership Act?

A)Those owing to partners by way of contribution,those owing to partnership creditors,those owing to separate creditors.
B)Those owing to separate creditors,those owing to partnership creditors,those owing to partners by way of contribution.
C)Those owing to separate creditors,those owing to partners by way of contribution,those owing to partnership creditors.
D)Those owing to partners by way of contribution,those owing to separate creditors,those owing to partnership creditors.
E)Those owing to partnership creditors,those owing to partners by way of contribution,those owing to separate creditors.

Question 35

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?

A)$0.
B)$1,500.
C)$3,000.
D)$21,750.
E)$36,250.

Question 36

White,Sands,and Luke has the following capital balances and profit and loss ratios;
$50,000 (30%),$100,000 (20%)and $200,000 (50%).If the partnership is to be liquidated and $150,000 becomes available for the partners immediately,who gets the money?

A)$0 White;$57,143 Sands;$92,857 Luke.
B)$10,000 White;$47,143 Sands;$92,857 Luke.
C)$0 White;$47,143 Sands;$102,857 Luke.
D)$20,000 White;$57,143 Sands;$82,857 Luke.
E)$30,857 White;$57,143 Sands;$62,000 Luke.

Question 37

Which of the following statements is false concerning the Schedule of Liquidation?

A)Liquidations may take a considerable length of time to complete.
B)Frequent reporting by the accountant is rarely necessary.
C)The Schedule of Liquidation provides a listing of transactions to date,current cash,and capital balances.
D)The Schedule of Liquidation provides a listing of property still being held by the partnership and liabilities remaining unpaid.
E)The Schedule of Liquidation keeps creditors and partners apprised of the results of the process of dissolution.

Question 38

Which of the following statements is true concerning the distribution of safe payments?

A)The distribution of safe payments assumes that any capital deficit balances will prove to be a total loss to the partnership.
B)Safe payments are equal to the recorded capital balances of partners with positive capital balances.
C)The distribution of safe payments may only be made after all liabilities have been paid.
D)In computing safe payments,partners with positive capital balances are assumed to absorb an equal share of any deficit balance(s).
E)There are no safe payments until the liquidation is complete.

Question 39

Gonda,Herron,and Morse is considering possible liquidation because Morse is insolvent.The partners have the following capital 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 assets that can be sold for $150,000.What is the minimum that Morse's creditors would receive if they have filed a claim for $50,000?

A)$0.
B)$27,500.
C)$45,000.
D)47,500.
E)50,000.

Question 40

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?

A)Harding $7,500;Jones $18,882.
B)Harding $10,813;Jones $7,569.
C)Harding $8,000;Jones $18,382.
D)Harding $9,000;Jones $17,382.
E)Harding $7,000;Jones $19,382.

Question 41

What term is used for the ranking of creditors' claims against an individual?

Question 42

The Albert,Boynton,and Creamer partnership was in the process of liquidating its assets and going out of business.Albert,Boynton,and Creamer had capital account balances of $80,000,$120,000,and $200,000,respectively,and shared profits and losses in the ratio of 1:3:2.Equipment that had cost $90,000 and had a book value of $60,000 was sold for $24,000.
Required:
Prepare the appropriate journal entry.

Question 43

What is the purpose of a predistribution plan?

Question 44

REFERENCE: Ref.15_02
On January 1,2009,the partners of Won,Cadel,and Dax (who shared profits and losses in the ratio of 5:3:2,respectively)decided to liquidate their partnership.The trial balance at this date was as follows:
The partners planned a program of piecemeal conversion of the business assets to minimize liquidation losses.All available cash,less an amount retained to provide for future expenses,was to be distributed to the partners at the end of each month.A summary of liquidation transactions follows:

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

Question 45

Why is a Schedule of Liquidation prepared?

Question 46

The Arnold,Bates,Carlton,and Delbert partnership was liquidating.It had paid all of its liabilities and had some assets yet to be sold.The partners had capital account balances of ($50,000),$90,000,$110,000,and $130,000.There was $40,000 cash available for distribution to the partners.What procedures would be followed to determine the amount of cash that could safely be distributed to each partner?

Question 47

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?

Question 48

For a partnership,how should liquidation gains and losses be accounted for?

Question 49

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

Question 50

What should occur when a solvent partner has a deficit balance?

Question 51

What is a safe cash payment?

Question 52

The Amos,Billings,and Cleaver partnership had two assets: (1)cash of $40,000 and (2)an investment with a book value of $110,000.The ratio for sharing profits and losses is 2:1:1.The balances in the capital accounts were:
Amos,capital: $45,000
Billings,capital: $75,000
Cleaver,capital: $30,000
Required:
If the investment was sold for $80,000,how much cash would each partner have received?

Question 53

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?

Question 54

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?

Question 55

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

Question 56

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?

Question 57

What would be the maximum amount Garr might have had to contribute to the partnership to eliminate a deficit balance in his account?

Question 58

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?

Question 59

If the noncash assets were sold for $105,000,what would have been the maximum amount of cash that Canton could have expected to receive?

Question 60

What are the provisions of the marshaling of assets doctrine?

Question 61

REFERENCE: Ref.15_03
Hardin,Sutton,and Williams has operated a local business as a partnership for several years.All profits and losses have been allocated on a 3:2:1 ratio,respectively.Recently,Williams has undergone personal financial problems,and is insolvent.To satisfy Williams' creditors,the partnership has decided to liquidate.
The following balance sheet has been produced:
During the liquidation process,the following transactions take place:
- Noncash assets are sold for $116,000.
- Liquidation expenses of $12,000 are paid.No further expenses are expected.
- Safe capital distributions are made to the partners.
- Payment is made of all business liabilities.
- Any deficit capital balances are deemed to be uncollectible.
Prepare journal entries to record the actual liquidation transactions.

Question 62

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 the realization of the other assets.

Question 63

REFERENCE: Ref.15_03
Hardin,Sutton,and Williams has operated a local business as a partnership for several years.All profits and losses have been allocated on a 3:2:1 ratio,respectively.Recently,Williams has undergone personal financial problems,and is insolvent.To satisfy Williams' creditors,the partnership has decided to liquidate.
The following balance sheet has been produced:
During the liquidation process,the following transactions take place:
- Noncash assets are sold for $116,000.
- Liquidation expenses of $12,000 are paid.No further expenses are expected.
- Safe capital distributions are made to the partners.
- Payment is made of all business liabilities.
- Any deficit capital balances are deemed to be uncollectible.
Jones,Marge,and Tate LLP decided to dissolve and liquidate the partnership on September 31,2009.After realization of a portion of the noncash assets,the capital account balances were Jones $50,000;Marge $40,000;and Tate $15,000.Cash of $35,000 and other assets with a carrying amount of $100,000 were on hand.Creditors' claims totaled $30,000.Jones,Marge,and Tate shared net income and losses in a 2:1:1 ratio,respectively.
Prepare a working paper to compute the amount of cash that may be paid to creditors and to partners at this time,assuming that no partner is solvent.

Question 64

REFERENCE: Ref.15_03
Hardin,Sutton,and Williams has operated a local business as a partnership for several years.All profits and losses have been allocated on a 3:2:1 ratio,respectively.Recently,Williams has undergone personal financial problems,and is insolvent.To satisfy Williams' creditors,the partnership has decided to liquidate.
The following balance sheet has been produced:
During the liquidation process,the following transactions take place:
- Noncash assets are sold for $116,000.
- Liquidation expenses of $12,000 are paid.No further expenses are expected.
- Safe capital distributions are made to the partners.
- Payment is made of all business liabilities.
- Any deficit capital balances are deemed to be uncollectible.
Compute safe cash payments after the noncash assets have been sold and the liquidation expenses have been paid.

Question 65

REFERENCE: Ref.15_04
The balance sheet of Rogers,Dennis & Berry LLP prior to liquidation included the following: The three partners shared net income and losses in a 5:3:2 ratio,respectively.Noncash assets were sold for $60,000.Creditors were paid in full,partners were paid $35,000,and the balance of cash was retained pending future developments.
Record the journal entry for the sale of the noncash assets.

Question 66

REFERENCE: Ref.15_04
The balance sheet of Rogers,Dennis & Berry LLP prior to liquidation included the following: The three partners shared net income and losses in a 5:3:2 ratio,respectively.Noncash assets were sold for $60,000.Creditors were paid in full,partners were paid $35,000,and the balance of cash was retained pending future developments.
Record the journal entry for payment of outstanding liabilities to the creditors.

Question 67

REFERENCE: Ref.15_04
The balance sheet of Rogers,Dennis & Berry LLP prior to liquidation included the following: The three partners shared net income and losses in a 5:3:2 ratio,respectively.Noncash assets were sold for $60,000.Creditors were paid in full,partners were paid $35,000,and the balance of cash was retained pending future developments.
Determine the cash to be retained and prepare a schedule to distribute $35,000 cash to the partners.

Question 68

REFERENCE: Ref.15_03
Hardin,Sutton,and Williams has operated a local business as a partnership for several years.All profits and losses have been allocated on a 3:2:1 ratio,respectively.Recently,Williams has undergone personal financial problems,and is insolvent.To satisfy Williams' creditors,the partnership has decided to liquidate.
The following balance sheet has been produced:
During the liquidation process,the following transactions take place:
- Noncash assets are sold for $116,000.
- Liquidation expenses of $12,000 are paid.No further expenses are expected.
- Safe capital distributions are made to the partners.
- Payment is made of all business liabilities.
- Any deficit capital balances are deemed to be uncollectible.
Develop a predistribution plan for this partnership,assuming $12,000 of liquidation expenses are expected to be paid.

Question 69

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 the elimination of the loan receivable from Donald.

Question 70

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 schedule to compute the cash payments to the partners.

Question 71

REFERENCE: Ref.15_02
On January 1,2009,the partners of Won,Cadel,and Dax (who shared profits and losses in the ratio of 5:3:2,respectively)decided to liquidate their partnership.The trial balance at this date was as follows:
The partners planned a program of piecemeal conversion of the business assets to minimize liquidation losses.All available cash,less an amount retained to provide for future expenses,was to be distributed to the partners at the end of each month.A summary of liquidation transactions follows:

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

Question 72

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.

Question 73

REFERENCE: Ref.15_02
On January 1,2009,the partners of Won,Cadel,and Dax (who shared profits and losses in the ratio of 5:3:2,respectively)decided to liquidate their partnership.The trial balance at this date was as follows:
The partners planned a program of piecemeal conversion of the business assets to minimize liquidation losses.All available cash,less an amount retained to provide for future expenses,was to be distributed to the partners at the end of each month.A summary of liquidation transactions follows:

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