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Exam 16: Partnership Liquidation

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Question 1

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The partnership of Mick,Keith,and Charlie has been dissolved and is in the process of liquidation.On July 1,2017,just before the second cash distribution,the assets and equities of the partnership along with residual profit sharing ratios were as follows: Assume that the available cash is distributed immediately,except for a $25,000 contingency fund that is withheld pending complete liquidation of the partnership.How much cash should be paid to each of the partners?

A) Mick,$87,500; Keith,$52,500; Charlie,$35,000
B) Mick 12,500; Keith ,7,500; Charlie,10,000
C) Mick - 0 -; Keith,25,000; Charlie,- 0 -
D) Mick - 0 -; Keith,15,000; Charlie,10,000

E) A) and B)
F) A) and C)

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Question 2

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Gilligan,Skipper,and Professor are partners with a profit and loss ratio of 4:3:3.The partnership was liquidated and,prior to the liquidation process,the partnership balance sheet was as follows: After the partnership was liquidated and the cash was distributed,Skipper received $96,000 in cash in full settlement of his interest. The liquidation loss must have been:

A) $360,000
B) $144,000
C) $504,000
D) $480,000

E) A) and B)
F) All of the above

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Question 3

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The NOR Partnership is being liquidated.A balance sheet prepared prior to liquidation is presented below: Nutt,Ohm,and Rice share profits and losses in a 40:40:20 ratio.All partners are personally insolvent. Required: A.Prepare the journal entries necessary to record the distribution of the available cash. B.Prepare the journal entries necessary to record the completion of the liquidation process,assuming the other assets are sold for $120,000.

The first step in preparing an advance cash distribution plan is to:

In a partnership liquidation the final cash distribution to the partners should be made in accordance with the:

Due to the fact that the partnership had been unprofitable for the past several years,A,B,C,and D decided to liquidate their partnership.The partners share profits and losses in the ratio of 40:30:20:10,respectively.The following balance sheet was prepared immediately before the liquidation process began: The partnership's other assets are sold for $100,000 cash.The partnership operates in a state which has adopted the Uniform Partnership Act. Required: A.Complete the following schedule of partnership realization and liquidation.Assume that a partner makes additional contributions to the partnership when appropriate based on their individual status. B.Complete the following schedule to show the total amount that will be paid to the personal creditors.

Offsetting a partner's loan balance against his debit capital balance is referred to as the:

The first step in the liquidation process is to:

The Uniform Partnership Act specifies specific steps in distributing available partnership assets in liquidation.Describe the steps used to distribute partnership assets during the liquidation process.

The partnership of Stan,Kenney,and Cartman has been dissolved and is in the process of liquidation.On July 1,2017,just before the second cash distribution,the assets and equities of the partnership along with residual profit sharing ratios were as follows: Assume that the available cash is distributed immediately,except for a $10,000 contingency fund that is withheld pending complete liquidation of the partnership.How much cash should be paid to each of the partners?

Which of the following statements is correct?

The partnership of Homer,Marge,and Bart share profits and losses in the ratio of 4:4:2,respectively.The partners voted to dissolve the partnership when its assets,liabilities,and capital were as follows: The partnership will be liquidated over a prolonged period of time.As cash is available,it will be distributed to the partners.The first sale of noncash assets having a book value of $360,000 realized $285,000.How much cash should be distributed to each partner after this sale?

A schedule prepared each time cash is to be distributed is called a(n) :

The ABC partnership has the following capital accounts on its books at December 31,2017: All liabilities have been liquidated and the cash balance is zero.None of the partners have personal assets in excess of his personal liabilities.The partners share profits and losses in the ratio of 3:2:5.If the noncash assets are sold for $400,000,the partners should receive as a final payment:

The trial balance for the ABC Partnership is as follows just before liquidation: Partners share profits a 50:30:20 ratio. Required: Prepare an advance cash distribution plan showing how available cash would be distributed.

The summarized balances of the accounts of RST partnership on December 31,2017,are as follows: The agreed upon profit/loss ratio is 50:40:10,respectively.Using the information given above,which one of the following amounts,if any,is the loss absorption potential of partner S as of December 31,2017?

The partnership of Mick,Keith,and Charlie has been dissolved and is in the process of liquidation.On July 1,2017,just before the second cash distribution,the assets and equities of the partnership along with residual profit sharing ratios were as follows: Assume that Mick takes equipment with a fair value of $40,000 and a book value of $50,000 in partial satisfaction of his equity in the partnership.If all the $200,000 cash is then distributed,the partners should receive:

The partnership of Larry,Moe,and Curly shares profits and losses 60%,30%,and 10%,respectively.On January 1,2017,the partners voted to dissolve the partnership,at which time the assets,liabilities,and capital balances were as follows: All of the partners are personally insolvent. Assume that all noncash assets are sold for $840,000 and all available cash is distributed in final liquidation of the partnership.Cash should be distributed to the partners as follows:

In an advance plan for installment distributions of cash to partners of a liquidating partnership,each partner's loss absorption potential is computed by:

The December 31,2016,balance sheet of the Deng,Danielson,and Gibson partnership,along with the partners' residual profit and loss sharing ratios,is summarized as follows: The partners agree to liquidate their partnership as soon as possible after January 1,2017 and to distribute all cash as it becomes available. Required: Prepare an advance cash distribution plan to show how cash will be distributed as it becomes available.