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

 
 
*   Allocation of gain to partners:
    Gain:           $420,000 – $367,000        =      $53,000
    Malkin:        $53,000 ´ 0.20                   =      $10,600
    Neale:         $53,000 ´ 0.40                   =      $21,200
    Staal:           $53,000 ´ 0.40                   =      $21,200
 
 
 

                                                                                                  (continued) P12-7A
Req. 1b
Malkin, Neale, and Staal
Summary of Liquidation Transactions
 Cash +Noncash Assets =LiabilitiesCapital
Malkin
+ (20%)Neale
+ (40%)Staal
+ (40%)
Balances before sale of assets$   41,000$367,000$151,000$57,500$158,500$   41,000
Sale of assets and sharing of loss  338,000(367,000)                  (5,800)*  (11,600)*(11,600)*
Balances379,0000151,00051,700146,90029,400
Payment of liabilities(151,000)              (151,000)                                          
Balances228,00000    51,700  146,900   29,400
Disbursement of cash to partners(228,000)                              (51,700)(146,900) (29,400)
Balances$            0$           0$           0$           0$           0$            0
 
 
*   Allocation of loss to partners:
    Loss:           $338,000 – $367,000        =    ($29,000)
    Malkin:        ($29,000) ´ 0.20                =    ($  5,800)
    Neale:         ($29,000) ´ 0.40                =    ($11,600)
    Staal:           ($29,000) ´ 0.40                =    ($11,600)
                                                                            (continued) P12-7A
Req. 2
General Journal
Date
2020Account Titles and ExplanationsPost. Ref.DebitCredit
Dec.31Cash 338,000 
  Loss on Disposal 29,000 
       Noncash Assets  367,000