The partnership of Wingler, Norris, Rodgers, and Guthrie was formed several years ago as a local architectural firm. Sev
Posted: Mon May 02, 2022 7:22 am
The partnership of Wingler, Norris, Rodgers, and Guthrie was
formed several years ago as a local architectural firm. Several
partners have recently undergone personal financial problems and
have decided to terminate operations and liquidate the business.
The following balance sheet is drawn up as a guideline for this
process: Cash $ 57,000 Liabilities $ 58,000 Accounts receivable
124,000 Rodgers, loan 77,000 Inventory 143,000 Wingler, capital
(30%) 183,000 Land 106,000 Norris, capital (10%) 130,000 Building
and equipment (net) 189,000 Rodgers, capital (20%) 95,000 Guthrie,
capital (40%) 76,000 Total assets $ 619,000 Total liabilities and
capital $ 619,000 When the liquidation commenced, liquidation
expenses of $23,000 were anticipated as being necessary to dispose
of all property. Part A Prepare a predistribution plan for this
partnership. Part B The following transactions transpire during the
liquidation of the Wingler, Norris, Rodgers, and Guthrie
partnership: Collected 80 percent of the total accounts receivable
with the rest judged to be uncollectible. Sold the land, building,
and equipment for $171,000. Distributed safe payments of cash.
Learned that Guthrie, who has become personally insolvent, will
make no further contributions. Paid all liabilities. Sold all
inventory for $96,000. Distributed safe payments of cash again.
Paid actual liquidation expenses of $14,000 only. Made final cash
disbursements to the partners based on the assumption that all
partners other than Guthrie are personally solvent. Prepare journal
entries to record these liquidation transactions.
formed several years ago as a local architectural firm. Several
partners have recently undergone personal financial problems and
have decided to terminate operations and liquidate the business.
The following balance sheet is drawn up as a guideline for this
process: Cash $ 57,000 Liabilities $ 58,000 Accounts receivable
124,000 Rodgers, loan 77,000 Inventory 143,000 Wingler, capital
(30%) 183,000 Land 106,000 Norris, capital (10%) 130,000 Building
and equipment (net) 189,000 Rodgers, capital (20%) 95,000 Guthrie,
capital (40%) 76,000 Total assets $ 619,000 Total liabilities and
capital $ 619,000 When the liquidation commenced, liquidation
expenses of $23,000 were anticipated as being necessary to dispose
of all property. Part A Prepare a predistribution plan for this
partnership. Part B The following transactions transpire during the
liquidation of the Wingler, Norris, Rodgers, and Guthrie
partnership: Collected 80 percent of the total accounts receivable
with the rest judged to be uncollectible. Sold the land, building,
and equipment for $171,000. Distributed safe payments of cash.
Learned that Guthrie, who has become personally insolvent, will
make no further contributions. Paid all liabilities. Sold all
inventory for $96,000. Distributed safe payments of cash again.
Paid actual liquidation expenses of $14,000 only. Made final cash
disbursements to the partners based on the assumption that all
partners other than Guthrie are personally solvent. Prepare journal
entries to record these liquidation transactions.