Question

Lewis, Zapata, and Fowler share equally in net income and net losses. After the partnership sells...

Lewis, Zapata, and Fowler share equally in net income and net losses. After the partnership sells all assets for cash, divides the losses on realization, and pays the liabilities, the balances in the capital accounts are as follows: Lewis, $39,300 Cr.; Zapata, $86,500 Cr.; Fowler, $25,200 Dr.

a. What term is applied to the debit balance in Fowler's capital account?

b. What is the amount of cash on hand?

c. Journalize the transaction that must take place for Lewis and Zapata to receive cash in the liquidation process equal to their capital account balances

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Part 1 - Debit Balance in capital account of fowler's is known as 'Deficiency'.

Part 2 - Calculation of amount of cash on hand

Calculation can be done by analysing the capital balances of partners as per basic accounting equation

[Capital + liabilities = Assets]

Particulars Amount
Lewis $39300
Zapata $86500
Fowler ($25200)
Cash Balane in hand $100600

Part 3 - Journal entry Worksheet to make the sufficient cash balance for distribution of cash to lewis and zapata

Accounts Title Debit Credit
Cash $25200
Fowler's Capital $25200
($25200 needs to be collected from fowler during the liquidation process to make the cash balance upto $125800. $125800 then will be distributed to lewis ($39300) and zapata ($86500)
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
After the accounts are closed on April 10, prior to liquidating the partnership, the capital accounts...
After the accounts are closed on April 10, prior to liquidating the partnership, the capital accounts of Zach Fairchild, Austin Lowes, and Amber Howard are $31,400, $5,700, and $23,800, respectively. Cash and noncash assets total $8,400 and $61,300, respectively. Amounts owed to creditors total $8,800. The partners share income and losses in the ratio of 1:1:2. Between April 10 and April 30, the noncash assets are sold for $32,500, the partner with the capital deficiency pays the deficiency to the...
Distribution of Cash Upon Liquidation Pryor and Lester are partners, sharing gains and losses equally. They...
Distribution of Cash Upon Liquidation Pryor and Lester are partners, sharing gains and losses equally. They decide to terminate their partnership. Prior to realization, their capital balances are $18,000 and $12,000, respectively. After all noncash assets are sold and all liabilities are paid, there is a cash balance of $23,000. a. What is the amount of a gain or loss on realization? Gain or Loss Amount $ b. How should the gain or loss be divided between Pryor and Lester?...
Distribution of Cash Upon Liquidation Hewitt and Patel are partners, sharing gains and losses equally. They...
Distribution of Cash Upon Liquidation Hewitt and Patel are partners, sharing gains and losses equally. They decide to terminate their partnership. Prior to realization, their capital balances are $42,000 and $28,000, respectively. After all noncash assets are sold and all liabilities are paid, there is a cash balance of $53,000. a. What is the amount of a gain or loss on realization? $ b. How should the gain or loss be divided between Hewitt and Patel? Hewitt Patel c. How...
In Sandhill Co., capital balances are Irey $39,300 and Pedigo $56,900. The partners share income equally....
In Sandhill Co., capital balances are Irey $39,300 and Pedigo $56,900. The partners share income equally. Vernon is admitted to the firm with a 44% interest by an investment of cash of $41,000. Journalize the admission of Vernon. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit   
Statement of Partnership Liquidation After closing the accounts on July 1, prior to liquidating the partnership,...
Statement of Partnership Liquidation After closing the accounts on July 1, prior to liquidating the partnership, the capital account balances of Gold, Porter, and Sims are $24,000, $34,200, and $15,300, respectively. Cash, noncash assets, and liabilities total $36,600, $63,300, and $26,400, respectively. Between July 1 and July 29, the noncash assets are sold for $50,700, the liabilities are paid, and the remaining cash is distributed to the partners. The partners share net income and loss in the ratio of 3:2:1....
Statement of Partnership Liquidation After closing the accounts on July 1, prior to liquidating the partnership,...
Statement of Partnership Liquidation After closing the accounts on July 1, prior to liquidating the partnership, the capital account balances of Gold, Porter, and Sims are $45,000, $63,900, and $28,500, respectively. Cash, noncash assets, and liabilities total $66,600, $118,500, and $47,700, respectively. Between July 1 and July 29, the noncash assets are sold for $94,500, the liabilities are paid, and the remaining cash is distributed to the partners. The partners share net income and loss in the ratio of 3:2:1....
Statement of Partnership Liquidation After closing the accounts on July 1, prior to liquidating the partnership,...
Statement of Partnership Liquidation After closing the accounts on July 1, prior to liquidating the partnership, the capital account balances of Gold, Porter, and Sims are $22,200, $31,800, and $14,100, respectively. Cash, noncash assets, and liabilities total $36,600, $58,800, and $27,300, respectively. Between July 1 and July 29, the noncash assets are sold for $46,800, the liabilities are paid, and the remaining cash is distributed to the partners. The partners share net income and loss in the ratio of 3:2:1....
Liquidating Partnerships—Capital Deficiency Nettles, King, and Tanaka are partners sharing income 3:2:1. After the firm's loss...
Liquidating Partnerships—Capital Deficiency Nettles, King, and Tanaka are partners sharing income 3:2:1. After the firm's loss from liquidation is distributed, the capital account balances were: Nettles, $18,000 Dr.; King, $68,000 Cr.; and Tanaka, $45,000 Cr. If Nettles is personally bankrupt and unable to pay any of the $18,000, what will be the amount of cash received by King and Tanaka upon liquidation? If an amount is zero, enter in 0. Use the minus sign to indicate any deficiencies. Amount of...
1. Admitting New Partners Who Buy an Interest and Contribute Assets The capital accounts of Trent...
1. Admitting New Partners Who Buy an Interest and Contribute Assets The capital accounts of Trent Henry and Tim Chou have balances of $187,500 and $135,200, respectively. LeAnne Gilbert and Becky Clarke are to be admitted to the partnership. Gilbert buys one-fifth of Henry’s interest for $43,100 and one-fourth of Chou’s interest for $29,700. Clarke contributes $45,800 cash to the partnership, for which she is to receive an ownership equity of $45,800. a1. Journalize the entry to record the admission...
Partner 1 and Partner 2 share income equally. During the current year the partnership net income...
Partner 1 and Partner 2 share income equally. During the current year the partnership net income was $40,000. Partner 1 made withdrawals of $12,000 and Partner 2 made withdrawals of $17,000. At the beginning of the year, the capital account balances were: Partner 1 capital, $42,000; Partner 2 capital, $58,000. Partner 2’s capital account balance at the end of the year is what? Please show work to help me understand the material.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT