Horngren’s Accounting, Volume 2, 11th Canadian Edition by Tracie Miller-Nobles Solution manual
Lang: ($91,200) ´ 0.20 = ($18,240)
Req. 2
If some partners have no personal assets, the other partners must absorb the deficit balance to liquidate the partnership. They can then personally sue the partner for the deficit. Caution would need to be exercised because if there is no money to pay the deficit, then there is likely no money to pay the lawsuit.
Problems
Group B
Req. 1 (15–20 min.) P12-1B
General Journal
Date
2020Account Titles and ExplanationsPost. Ref.DebitCredit
Jan.1Accounts Receivable 20,000
Inventory 48,000
Prepaid Expenses 4,000
Office Equipment 56,000
Accounts Payable 48,000
Val Havlac, Capital 80,000
To record Havlac’s investment in the partnership.
1Cash 80,000
Svitlana Yaeger, Capital 80,000
To record Yaeger’s investment in the partnership.
Req. 2
YEAGER AND HAVLAC
Balance Sheet
January 1, 2020
Assets Liabilities
Cash$80,000Accounts payable$ 48,000
Accounts receivable 20,000
Inventory48,000Partners’ Equity
Prepaid expenses4,000Val Havlac, capital80,000
Office equipment 56,000Svitlana Yaeger, capital 80,000
Total partners’ equity 160,000
Total assets$208,000Total liabilities and equity$208,000
(continued) P12-1B
Req. 3
Havlac and Yaeger
Partnership Balances
December 31, 2020
HavlacYaeger Total
Beginning Balance$80,000$80,000 $160,000
Allocation of net income to partners:
Havlac ($276,000 ´ 2/3)184,000
Yaeger ($276,000 ´ 1/3) 92,000 276,000
Balance264,000172,000 436,000
Less: Withdrawals76,00056,000 132,000
Ending Capital Balance $188,000 $116,000 $ 304,000
Req. 1 (25–30 min.) P12-2B
Berlo, Felini, and Valente
Allocation of Profits and Losses
BerloFeliniValenteTotal
a. Total net income (net loss) $(200,000)
Allocation to the partners:
Berlo ($200,000 ´ 0.40)$(80,000)
Felini ($200,000 ´ 0.25) $(50,000)