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

 Cash +Noncash Assets =LiabilitiesCapital
Du
+ (10%)Chong
+ (30%)Smith
+ (60%)
Balances before sale of assets$    70,000$526,000$316,000$80,000$102,000$ 98,000
Sale of assets and sharing of gain  552,000(526,000)                2,600*   7,800*  15,600*
Balances622,0000316,00082,600109,800113,600
Payment of liabilities(316,000)              (316,000)                                       
Balances306,00000    82,600   109,800  113,600
Disbursement of cash to partners(306,000)                            (82,600)(109,800)(113,600)
Balances$             0$           0$           0$         0$           0$          0
 
 
*   Allocation of gain to partners:
    Gain:           $552,000 – $526,000        =      $26,000
    Du:              $26,000 ´ 0.10                   =      $  2,600
    Chong:        $26,000 ´ 0.30                   =      $  7,800
    Smith:          $26,000 ´ 0.60                   =    $  15,600
 

                                                    (continued) P12-7B
Req. 1b
Du, Chong, and Smith
Summary of Liquidation Transactions
 Cash +Noncash Assets =LiabilitiesCapital
Du
+ (10%)Chong
+ (30%)Smith
+ (60%)
Balances before sale of assets$  70,000$ 526,000$316,000$  80,000$  102,000$   98,000
Sale of assets and sharing of loss  448,000(526,000)                (7,800)*  (23,400)*(46,800)*
Balances518,0000316,00072,20078,60051,200
Payment of liabilities  (316,000)               (316,000)                                             
Balances202,00000    72,200    78,600    51,200
Disbursement of cash to partners  (202,000)                                (72,200)   (78,600) (51,200)
Balances$           0$            0$           0$           0$             0$           0
 
 
*   Allocation of loss to partners:
    Loss:           $526,000 – $448,000        =    ($78,000)