Distribution of Cash Upon Liquidation
Bray, Lincoln, and Mapes arranged to import and sell orchid corsages for a university dance. They agreed to share equally the net income or net loss of the venture. Bray and Lincoln advanced $780 and $1,200 of their own respective funds to pay for advertising and other expenses. After collecting for all sales and paying creditors, the partnership has $3,210 in cash.
Use the minus sign to indicate any deficiency for the capital accounts.
a. How much net income was earned from the venture?
$fill in the blank 1
b. How should the $3,210 be distributed?
| Bray | Lincoln | Mapes | Total | |
| Capital balances and cash distribution | $fill in the blank 2 | $fill in the blank 3 | $fill in the blank 4 | $fill in the blank 5 |
c. Assume that the partnership has only $1,710 instead of $3,210. Complete the following table to determine if any of the three partners have a capital deficiency?
| Bray | Lincoln | Mapes | Total | |
| Capital balances | $fill in the blank 6 | $fill in the blank 7 | $fill in the blank 8 | $fill in the blank 9 |
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?
| $fill in the blank 69cc8204afa805c_2 |
b. How should the gain or loss be divided between Hewitt and Patel?
| Hewitt | fill in the blank c0e0ee03cfeaf87_2 | |
| Patel | fill in the blank c0e0ee03cfeaf87_4 |
c. How should the cash be divided between Hewitt and Patel? If an amount is zero, enter “0”.
| Hewitt and Patel | ||
| Distribution of Cash | ||
| Hewitt | Patel | |
| Capital balances before realization | $fill in the blank 1b4b3604b01d051_1 | $fill in the blank 1b4b3604b01d051_2 |
| Division of gain or loss on realization | fill in the blank 1b4b3604b01d051_3 | fill in the blank 1b4b3604b01d051_4 |
| Balances | $fill in the blank 1b4b3604b01d051_5 | $fill in the blank 1b4b3604b01d051_6 |
| Cash distributed to partners | fill in the blank 1b4b3604b01d051_7 | fill in the blank 1b4b3604b01d051_8 |
| Final balances | $fill in the blank 1b4b3604b01d051_9 | $fill in the blank 1b4b3604b01d051_10 |
Distribution of Cash Upon Liquidation
Bray, Lincoln, and Mapes arranged to import and sell orchid corsages for a university dance. They agreed to share equally the net income or net loss of the venture. Bray and Lincoln advanced $330 and $510 of their own respective funds to pay for advertising and other expenses. After collecting for all sales and paying creditors, the partnership has $1,350 in cash.
Use the minus sign to indicate any deficiency for the capital accounts.
a. How much net income was earned from the venture?
$fill in the blank 1
b. How should the $1,350 be distributed?
| Bray | Lincoln | Mapes | Total | |
| Capital balances and cash distribution | $fill in the blank 2 | $fill in the blank 3 | $fill in the blank 4 | $fill in the blank 5 |
c. Assume that the partnership has only $720 instead of $1,350. Complete the following table to determine if any of the three partners have a capital deficiency?
| Bray | Lincoln | Mapes | Total | |
| Capital balances | $fill in the blank 6 | $fill in the blank 7 | $fill in the blank 8 | $fill in the blank 9 |
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