Horngren’s Accounting, Volume 2, 11th Canadian Edition by Tracie Miller-Nobles Solution manual
To record net loss on disposal of noncash assets.*
31Lisa Malkin, Capital 5,800
John Neale, Capital 11,600
Brian Staal, Capital 11,600
Loss on Disposal 29,000
To transfer net losses to partners’ capital accounts.*
31Liabilities 151,000
Cash 151,000
To pay liabilities in liquidation.
31Lisa Malkin, Capital 51,700
John Neale, Capital 146,900
Brian Staal, Capital 29,400
Cash 228,000
To distribute cash to partners in liquidation.
* Could also show this as one, combined journal entry.
(30–40 min.) P12-8A
Req. 1a
Telliher, Bachra, and Lang
Summary of Liquidation Transactions
Cash +Noncash Assets =LiabilitiesCapital
Telliher
+ (60%)Bachra
+ (20%)Lang
+ (20%)
Balances before sale of assets$ 6,750$118,800$28,350$46,600$30,000$ 20,600
Sale of assets and sharing of loss 36,300(118,800) (49,500)*(16,500)*(16,500)*
Balances43,050028,350(2,900)13,5004,100
Payment of liabilities(28,350) (28,350)
Balances14,70000 (2,900) 13,500 4,100
Allocation of Telliher deficiency—no assets to contribute 0 2,900(1,450)**(1,450)**
Balances14,700 012,0502,650
Disbursement of cash to partners(14,700) 0(12,050) (2,650)
Balances$ 0$ 0$ 0$ 0$ 0$ 0
* Allocation of loss to partners: ** Allocation of Telliher deficiency to remaining partners:
Loss: $118,800 – $36,300 = ($82,500) Bachra: ($2,900) ´ 0.20/0.40 = ($1,450)
Telliher: ($82,500) ´ 0.60 = ($49,500) Lang: ($2,900) ´ 0.20/0.40 = ($1,450)