Question

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?

Pryor
Lester

c. How should the cash be divided between Pryor and Lester? If an amount is zero, enter "0".

Lester and Pryor
Distribution of Cash
Pryor Lester
Capital balances before realization $ $
Division of gain or loss on realization
Balances $ $
Cash distributed to partners
Final balances $ $

Homework Answers

Answer #1

a.

Cash Balance............................................$23,000

Capital Balances($18,000+$12,000)...........$30,000

Loss.............................................................($7,000)

b.Because they are sharing profit and losses equally

Pryor($8,000/2) $3,500
Lestor($8,000/2) $3,500

c.

Distribution Of cash
Pryor Lestor
Capital Balances before realization $18,000 $12,000
Division of gain or loss on realization $3,500 $3,500
Balances
$14,500 $8,500
Cash distributed to partners $14,500 $8,500
Final Balances $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.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
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...
Statement of LLC Liquidation Lester, Torres, and Hearst are members of Arcadia Sales, LLC, sharing income...
Statement of LLC Liquidation Lester, Torres, and Hearst are members of Arcadia Sales, LLC, sharing income and losses in the ratio of 2:2:1, respectively. The members decide to liquidate the limited liability company. The members' equity prior to liquidation and asset realization on August 1 are as follows: Lester $27,900 Torres 64,500 Hearst 40,100 Total $132,500 In winding up operations during the month of August, noncash assets with a book value of $174,200 are sold for $216,000, and liabilities 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...
Immediately prior to the process of liquidation on December 31, 2014 partners Micco, Niccum, and Orwell...
Immediately prior to the process of liquidation on December 31, 2014 partners Micco, Niccum, and Orwell of MNO Partnership have capital balances of $70,000, $20,000, and $40,000, respectively. There is a cash balance of $20,000, noncash assets total $170,000, and liabilities total $60,000. The partners share net income and losses in the ratio of 3:2:1. (Different than lecture.) If there is a defeciency assume the partner pays it. Sold non-cash assets for $80,000. 1. Prepare the Statement of Partnership Liquidation...
Lester, Torres, and Hearst are members of Arcadia Sales, LLC, sharing income and losses in the...
Lester, Torres, and Hearst are members of Arcadia Sales, LLC, sharing income and losses in the ratio of 2:2:1, respectively. The members decide to liquidate the limited liability company. The members' equity prior to liquidation and asset realization on August 1 are as follows: Lester $29,700 Torres 68,700 Hearst 42,700 Total $141,100 In winding up operations during the month of August, noncash assets with a book value of $185,800 are sold for $230,400, and liabilities of $62,700 are satisfied. Prior...
In liquidation, just prior to the final distribution of cash to the partners, the balance in...
In liquidation, just prior to the final distribution of cash to the partners, the balance in the Cash account is $600,000; The partners have capital balances as follows: Presley, $290,000 credit; Laswell, $250,000 credit, and Hunter, $60,000 credit. The income ratio is 6:2:2, respectively. How much cash should be distributed to Presley? Partners Audrey, Betty, and Charles have capital account balances of $210,000 each. The income and loss ratio is 5:2:3, respectively. In the process of liquidating the partnership,noncash assets...
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...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT