Académique Documents
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Culture Documents
Advanced Accounting
14-27
a.
E=.25(270,000 + E)
E = 67,500 + .25E
.75E=67,500
E = $90,000
b.
Implied Value of partnership (36000/.10)
Total Capital after investment (270000+36000)
Goodwill
$360,000
$306,000
$54,000
Allocation of Goodwill:
A (30%)
$16,200
B (10%)
$5,400
C (40%)
$21,600
D(20%)
$10,800
Capital Balances:
A
$20,000
$16,200
$0
$36,200
Original Balance
Goodwill
Investment
Capital Balances
B
$40,000
$5,400
$0
$45,400
C
D
$90,000 $120,000
$21,600 $10,800
$0
$0
$111,600 $130,800
c.
42,000 + goodwill = .20(270,000 + 42,000 + goodwill)
42,000 + goodwill = 62,400 +.20 goodwill
.80 goodwill = 20,4000
Goodwill = 25,500
E capital balance (42000+25,500) =
All other balances would remain the same
$67,500
d.
Total Capital after investment (270000 + 55000)
Amount acquired by E
E capital balance
E payments
E bonus
A (10%)
B (30%)
C (20%)
D (40%)
$1,000
$3,000
$2,000
$4,000
$325,000
20%
$65,000
$55,000
$10,000
Capital Balances:
Original Balance
Investment
Bonus
Capital Balances
e.
C capital balance
C collection (125%)
Bonus paid to C
Bonus from:
A (1/3)
B (1/3)
D (1/3)
A
$20,000
$0
($1,000)
$19,000
B
$40,000
$0
($3,000)
$37,000
C
D
$90,000 $120,000
$0
$0
($2,000) ($4,000)
$88,000 $116,000
A
$20,000
($7,500)
$0
$12,500
B
C
D
$40,000
$90,000 $120,000
($7,500)
$22,500 ($7,500)
$0 ($112,500)
$0
$32,500
$0 $112,500
$90,000
$112,500
$22,500
$7,500
$7,500
$7,500
Capital Balances:
Original Balance
Bonus
Payment
Capital Balances
E
$0
$0
$36,000
$36,000
E
$0
$55,000
$10,000
$65,000
14-31
a.
1/1/2013 Building
Equipment
Cash
O'Donnell, Capital
Reese, Capital
52,000
16,000
12,000
40,000
40,000
22,000
1/1/2014 Cash
O'Donnell Capital
Reese, Capital
Dunn, Capital
15,000
300
1,700
12,000
10,000
17,000
10,340
5,000
5,000
10,340
5,000
5,000
O'Donnell
10,340
6,600
16,940
Resse
16,236
16,236
10824
10,824
44,000
16,940
16,236
10,824
Dunn
22,824
22,824
Dunn
17,000
(5,000)
10,824
22824
11,660
5,507
5,000
61,000
33,900
509
2,881
1/1/2013 Building
Equipment
Cash
Goodwill
O'Donnell capital
Reese capital
52,000
16,000
12,000
80,000
30,000
116,600
5,507
5,000
20,810
24,114
16,076
37,290
b.
80,000
80,000
20,000
10,000
15,000
225,000
37,500
20,000
10,000
7,500
20,000
10,000
7,500
O'Donnell
20,000
6,600
Resse
Dunn
26,600
10,440
10,440
44,000
26,600
10,440
6,960
26,588
46,000
22,118
12,800
9,200
6960
6,960
Dunn
37,500
(7,500)
6,960
36960
3,988
13,560
9,040
46,000
22,118
12,800
9,200
O'Donnell
22,118
9,150
31,268
Resse
17,839
17,839
Postner
11893
11,893
61,000
31,268
17,839
11,893
Postner
36,960
9,040
drawings
profit allocation
12/31/15 balances
(22,118)
31,268
119,738
1/1/2016 Goodwill
O'Donnell capital
Reese capital
Postner capital
14,321
53,562
(12,800)
17,839
69,039
2,148
7,304
4,869
53,562
(9,200)
11,893
48693
15-28
Collection of AR (66000-51000)
Sale of inventory
Liquidation expenses
Gain from Jan credit memorandum
Machinery and equipment (Net)
Poten. Unrecoded liab. & anticipated expenses
Totals
$282,000
($10,000)
$272,000
($28,000)
$244,000
($199,000)
$45,000
$0
$45,000
Van
50%
Bakel
30%
$118,000
($30,000)
$88,000
($14,000)
$74,000
($99,500)
($25,500)
$25,500
$0
$90,000
$20,000
$110,000
($8,400)
$101,600
($59,700)
$41,900
($15,300)
$26,600
Cox
20%
$74,000
$0
$74,000
($5,600)
$68,400
($39,800)
$28,600
($10,200)
$18,400
Cox
$68,400
($18,400)
($600)
$49,400
($1,200)
($37,800)
$10,400
$400
$10,800
Cox
$49,400
($400)
($8,600)
($1,000)
$39,400
15-31
a.
Partner
Wingler
Norris
Rodgers
Guthrie
Capital
Balance/loss
allocation
120,000/.30
88,000/.10
109,000/.20
60,000/.40
Partner
Wingler
Norris
Rodgers
Capital
Balance/loss
allocation
75,000/(30/60)
73,000/(10/60)
79,000 (20/60)
Partner
Norris
Rodgers
Capital
Balance/loss
allocation
48,000/(10/30)
29,000/(20/30)
Wingler
Norris
Beginning balances
loss of $150,000 (30:10:20:40)
Step one balances
Loss of $150,000 (30:10:20)
Step two balances
Loss of $43,500 (10:20)
Step three balances
$120,000
($45,000)
$75,000
($75,000)
$0
$0
$0
$88,000
($15,000)
$73,000
($25,000)
$48,000
($14,500)
$33,500
Predistribution Plan:
Payment of all liabilities and liquidation expenses have to be assured
$33,500 goes to Norris
Then, $43,500 is allocated to Norris at 10/30 and Rodgers at 20/30
Next, $150,000 is allocated to Wingler at 30/60, Norris at 10/60 and Rodgers at 20/60
Any other cash distributions are divided on the original progit and loss ratio
b.
1 Cash
Wingler, Capital
Norris, Capital
Rodgers Capital
Guthrie, Capital
Accounts Receivable
2 Cash
$65,600
$4,920
$1,640
$3,280
$6,560
$82,000
$150,000
Wingler, Capital
Norris, Capital
Rodgers Capital
Guthrie, Capital
Land
Building and Equipment
$30,900
$10,300
$20,600
$41,200
$85,000
$168,000
3 Wingler, Capital
Norris, Capital
Rodgers Loan
Rodgers Capital
Cash
$31,800
$568,600
$35,000
$15,200
$140,600
4 no entry required
5 Liabilities
Cash
74000
74000
6 Cash
Wingler, Capital
Norris, Capital
Rodgers Capital
Guthrie, Capital
Inventory
$71,000
$9,000
$3,000
$6,000
$12,000
7 Wingler, Capital
Norris, Capital
Rodgers Capital
Cash
$35,500
$11,833
$23,667
8 Wingler, Capital
Norris, Capital
Rodgers Capital
Guthrie, Capital
Cash
$3,300
$1,100
$2,200
$4,400
$101,000
$71,000
$11,000
Wingler
Beginning balances
loss on accounts receivable
Loss on land, build, and equip
Cash distribution
Loss on inventory
Cash distribution
Liquidation expenses
Subtotal
Gunthrie Insolvent
Current balances
Norris
$120,000
($4,920)
($30,900)
($31,800)
($9,000)
($35,500)
($3,300)
$4,580
($2,080)
$2,500
$88,000
($1,640)
($10,300)
($58,600)
($3,000)
($11,833)
($1,100)
$1,527
($693)
$834
Wingler, Capital
Norris, Capital
Rodgers Capital
Cash
$2,500
$834
$1,666
$5,000
Rodgers
Guthrie
$109,000
($30,000)
$79,000
($50,000)
$29,000
($29,000)
$0
$60,000
($60,000)
$0
$0
$0
$0
$0
Rodgers
Guthrie
$109,000
($3,280)
($20,600)
($50,200)
($6,000)
($23,667)
($2,200)
$3,053
($1,387)
$1,666
$60,000
($6,560)
($41,200)
$0
($12,000)
$0
($4,400)
($4,160)
$4,160
$0