How much money must the firm receive

Assignment Help Accounting Basics
Reference no: EM13169516

The following balance sheet is for a local partnership in which the partners have become veryunhappy with each other.

Cash. . . . . . . . . . . . . . . . . . $ 40,000            Liabilities . . . . . . . . . . . . . . . . . . . $ 30,000

Land. . . . . . . . . . . . . . . . . . 130,000             Adams, capital . . . . . . . . . . . . . . 80,000

Building . . . . . . . . . . . . . . . 120,000             Baker, capital. . . . . . . . . . . . . . . . 30,000

Carvil, capital . . . . . . . . .  . 60,000

Dobbs, capital . . . . . . . . . 90,000

Total assets . . . . . . . . . . . $290,000            Total liabilities and capital . . . . $290,000

To avoid more conflict, the partners have decided to cease operations and sell all assets. Usingthis information, answer the following questions. Each question should be viewed as an independentsituation related to the partnership's liquidation.

a. The $10,000 cash that exceeds the partnership liabilities is to be disbursed immediately. Ifprofits and losses are allocated to Adams, Baker, Carvil, and Dobbs on a 2:3:3:2 basis,respectively, how will the $10,000 be divided?

b. The $10,000 cash that exceeds the partnership liabilities is to be disbursed immediately.If profits and losses are allocated on a 2:2:3:3 basis, respectively, how will the $10,000 bedivided?

c. The building is immediately sold for $70,000 to give total cash of $110,000. The liabilities are then paid, leaving cash balance of $80,000. This cash is to be distributed to the partners.How much of this money will each partner receive if profits and losses are allocatedto Adams, Baker, Carvil, and Dobbs on a 1:3:3:3 basis, respectively?

d. Assume that profits and losses are allocated to Adams, Baker, Carvil, and Dobbs on a1:3:4:2 basis, respectively. How much money must the firm receive from selling the land andbuilding to ensure that Carvil receives a portion?

Reference no: EM13169516

Questions Cloud

What is the hybridization state of the bridgehead carbons : what is the hybridization state of the bridgehead carbons in [1.1.1] bicyclopentane (C5H8) and [1.1.1.0] tricyclopentane (C5H6)
Produce a final schedule of liquidation for this partnership : Produce a final schedule of liquidation for this partnership and the partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidateits business property. A balance sheet drawn up at this time shows the accountbalances:
Calculate the osmotic pressure : Calculate the osmotic pressure at 25°C of an aqueous solution of 1.00 g/L of a protein having molar mass=2.50×104 g/mol.
Make journal entries for the transactions : Prepare journal entries for the following transactions - Sold all inventory for $56,000 cash.
How much money must the firm receive : The $10,000 cash that exceeds the partnership liabilities is to be disbursed immediately.If profits and losses are allocated on a 2:2:3:3 basis, respectively, how will the $10,000 bedivided?
Entries to berecorded by the partnership : Porthos, with permission of the other partners, decides to sell half of his partnership interestto D'Artagnan for $50,000 in cash. No asset revaluation or goodwill is to be recordedby the partnership.
Statement of partners capital for the year : Determine the allocation of income for each of these three years and prepare in appropriate form a statement of partners' capital for the year ending December 31, 2013.
Partnership profit for 2013 should be assigned to partners : The partnership agreement of Jones, King, and Lane provides for the annual allocation of thebusiness's profit or loss
What is the bulk denisty of the contents of the tube : A copper tube is 1 inch in diameter and 2 feet long, it is filled with steel balls of 1 inch diameter. The space between the balls is filled with water. the specific gravity of the steel b all is 7.8. What is the bulk denisty of the contents of th..

Reviews

Write a Review

 

Accounting Basics Questions & Answers

  Calculate the maximum depreciation expense

During August of the prior year Julio purchased an apartment building that he used as a rental property. The basis was $1,400,000. Calculate the maximum depreciation expense during the current year?

  Basics of tax consequences of the transactions

Penny, Miesha, and Sabrina transfer property to Owl Corporation for 75% of its stock. Nancy, their attorney, receives 25% of the stock in Owl for legal services rendered in incorporating the business. What are the tax consequences of these transac..

  Prepare a schedule fore each of three years

On December 31, 2013, the child crisis center establishes an endowment fund with a $5 million gift of securities. Income from the endowment is to be used exclsuively to support a nutrition program.

  What are the sales, variable costs, contribution margin

What are the sales, variable costs, contribution margian, fixed costs, and the new income

  What financial ratio is most commonly used to evaluate

what financial ratio is most commonly used to evaluate charitable organizations? Why is this an important ratio to use for evaluation of the viability and strength of a non profit organization?

  Tax treatment of social security benefits

Based on your understanding of how social security benefits are taxed when received, is the tax treatment of social security benefits fair?

  Multiple arrangement revenue recognition

Quest Tech, Inc. manufactures and sells specialized data storage equipment and services to entertainment and media companies.

  Uniform partnership act of 1997

What is the Uniform Partnership Act of 1997 and what is the relevance to partnership accounting and what types of items are typically included in the partnership agreement? Explain.

  What is the amount of sj corporations loss

Jennie purchased 50 percent of the shares of SJ Corporation, a calendar year S corporation, for $7,000. She also guaranteed a corporate loan of $6,000. For 2011, SJ Corporation had an operating loss of $22,000. What is the amount of SJ Corporation..

  Weighted-average contribution margin ratio

Fields Corporation has two divisions; Sporting Goods and Sports Gear. The sales mix is 65% for Sporting Goods and 35% for Sports Gear. Fields incurs $2,220,000 in fixed costs. The contribution margin ratio for Sporting Goods is 30%, while for Spor..

  Eight steps for accounting cycle

What are the eight steps in the accounting cycle and how do they affect the financial statements? What happens if one is missing?

  Key elements of the inventory costing method

1. Discuss the key elements of the inventory costing method. 2. Discuss why it is appropriate to use this method.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd