Horngren’s Accounting, Volume 2, 11th Canadian Edition by Tracie Miller-Nobles Solution manual

       Stihl receives assets of$34,500
  
2.   Laksa’s owner’s equity before asset writedown$54,000
       Laksa’s share of asset write-down ($18,000 ´ 2/3)(12,000)
       Laksa’s owner’s equity after asset writedown$42,000
 

(10–15 min.) E12-14
General Journal
DateAccount Titles and ExplanationsPost. Ref.DebitCredit
a.May31Alana Bruno, Capital 4,800 
   Robert Kraft, Capital 9,600 
   Rollon Hamelin, Capital 9,600 
        Inventory  24,000
   To revalue the inventory and allocate the loss in value to the partners.   
       
  31Land 96,000 
        Alana Bruno, Capital  19,200
        Robert Kraft, Capital  38,400
        Rollon Hamelin, Capital  38,400
   To revalue the land and allocate the gain in value to the partners.   
       
b.May31Alana Bruno, Capital 122,400 
   Robert Kraft, Capital 28,800 
   Rollon Hamelin, Capital 28,800 
        Cash  180,000
   To record withdrawal of Bruno from the partnership.   
 
Calculations:
 
Loss allocation to the partners:
Bruno: $24,000  ´ 2/10 = $4,800
Kraft & Hamelin: $24,000 ´ 4/10 = $9,600
 
Gain on land revaluation to partners:
Bruno: $96,000 ´ 2/10 = $19,200
Kraft & Hamelin: $96,000 ´ 4/10 = $38,400
 
Bruno’s capital balance = $108,000 – $4,800 + $19,200 = $122,400
 
Bruno received partnership cash                                $ 180,000
Bruno’s capital balance at time of withdrawal            (122,400)
Loss to be shared by the other partners $   57,600 (EQUAL SPLIT)
 
 
 
 
 

(5–10 min.) E12-15
1.     Each partner receives cash equal to his or her capital balance because cash ($115,000) equals total partnership capital:
....... Jonas...........................................     $  57,500
....... Teese...........................................         34,500
....... Moyer.........................................         23,000
....... Total............................................     $115,000
2.     This company splits losses equally among the three owners. There is a $12,000 loss, so each owner loses $4,000. Therefore,
Jonas receives cash of $53,500 ($57,500 – [($115,000 – $103,000) ´ 1/3]).
        Teese received cash of $30,500 ($34,500 – [($115,000 – $103,000) ´ 1/3]).
        Moyer receives cash of $19,000 ($23,000 – [($115,000 – $103,000) ´ 1/3]).
 
                                                             (15–20 min.) E12-16
 
 Cash   +Noncash Assets   =LiabilitiesCapital
Garcia
+  (40%)Woods
+  (30%)Mickelson
+  (30%)
Balances before sale of assets$10,000$62,500$26,500$20,000$15,000$11,000
Sale of assets and sharing of gain 78,500 (62,500)                  6,400*     4,800*   4,800*
Balances88,500026,50026,40019,800  15,800
Payment of liabilities(26,500)             (26,500)