Horngren’s Accounting, Volume 2, 11th Canadian Edition by Tracie Miller-Nobles Solution manual
Du ($78,000) ´ 0.10 = ($ 7,800)
Chong: ($78,000) ´ 0.30 = ($23,400)
Smith: ($78,000) ´ 0.60 = ($46,800)
(continued) P12-7B
Req. 2
General Journal
Date
2020Account Titles and ExplanationsPost. Ref.DebitCredit
Dec.31Cash 448,000
Loss on Disposal 78,000
Noncash Assets 526,000
To record net loss on disposal of noncash assets.
31Jia Du, Capital 7,800
Denis Chong, Capital 23,400
Alan Smith, Capital 46,800
Loss on Disposal 78,000
To transfer net losses to partners’ capital accounts.
31Liabilities 316,000
Cash 316,000
To pay liabilities in liquidation.
31Jia Du, Capital 72,200
Denis Chong, Capital 78,600
Alan Smith, Capital 51,200
Cash 202,000
To distribute cash to partners in liquidation.
(30–40 min.) P12-8B
Req. 1a
Pavelski, Ovechin, and Oh
Summary of Liquidation Transactions
Cash +Noncash Assets =LiabilitiesCapital
Pavelski
+ (60%)Ovechin
+ (20%)Oh
+ (20%)
Balances before sale of assets$ 27,000$475,200$113,400$186,400$ 120,000$82,400
Sale of assets and sharing of loss145,200(475,200) (198,000)*(66,000)*(66,000)*
Balances172,2000113,400(11,600)54,00016,400
Payment of liabilities(113,400) (113,400)
Balances58,80000 (11,600) 54,000 16,400
Allocation of Pavelski deficiency—no assets to contribute 0 11,600**(5,800)**(5,800)**
Balances58,800 048,20010,600
Disbursement of cash to partners(58,800) 0(48,200)(10,600)
Balances$ 0$ 0$ 0$ 0$ 0$ 0
* Allocation of loss to partners: ** Allocation of Pavelski deficiency to remaining partners: