PROBLEM 3: COMPUTATIONS pg.

537 to 540

1) Computation for the gain or loss on the sale

A) Collection on accounts receivable 130,000
B) Sale of Inventory 200,000
C) Sale of Equipment 590,000
D) Liquidation Expenses (5,000)
Net Cash Proceeds 915,000
Less: Carrying amount of non cash assets (1,300,000)
Total loss on sale (385,000)

Allocating the gain or loss to the partner’s capital balances

A(50%) B(40%) C(10%) TOTALS

Capital Balances 600,000 420,000 170,000 1,190,000
Payable to A (right of offset) 50,000 50,000
Total 650,000 420,000 170,000 1,240,000
Allocation of Loss (192,500) (154,000) (38,500) (385,000)
Amounts received by the partners 457,500 266,000 131,500 855,000

Checking

Beginning balance of cash 40,000

Net proceeds from the sale of non-cash assets 915,000
Less: Payment for outside creditors (100,000)
Cash available for distribution to partners 855,000

2) Computation for the gain or loss on the sale

a)Collection on accounts receivable 60,000
b)Sale of Inventory 40,000
c)Sale of Equipment 220,000
d)Actual Liquidation Expenses (2,000)
e) Estimated liquidation expenses (3,000)
f) Cash retained for future expenses (10,000)
Net cash proceeds 305,000
Less: Carrying amount of non cash assets (1,300,000)
Total Loss 995,000

Allocating the gain or loss to the partner’s capital balances

 A(50%) B(40%) C(10%) TOTALS
Capital Balances 600,000 420,000 170,000 1,190,000
Payable to A (right of offset) 50,000 50,000
Total 650,000 420,000 170,000 1,240,000
Allocation of Loss (497,500) (398,000) (99,500) (995,000)
Amounts received by the partners 152,500 22,000 70,500 245,000

Checking

Beginning balance of cash 40,000

Net proceeds from the sale of non-cash assets 305,000
Less: Payment for outside creditors (100,000)
Cash available for distribution to partners 245,000

3) Computation for the gain or loss on the sale

a.) Collection on accounts receivable 40,000
b.) Sale of Inventory 70,000
c.) Sale of Equipment 130,000
d)Actual Liquidation Expenses (2,000)
e) Estimated liquidation expenses (3,000)
f) Cash retained for future expenses (10,000)
Net Cash Proceeds 225,000
Less: Carrying amount of non cash assets (1,300,000)
Total loss on sale (1,075,000)

Allocating the gain or loss to the partner’s capital balances

A(50%) B(40%) C(10%) TOTALS

Capital Balances 600,000 420,000 170,000 1,190,000
Payable to A (right of offset) 50,000 50,000
Total 650,000 420,000 170,000 1,240,000
Allocation of Loss (537,500) (430,000) (107,500) (1,075,000)
Totals 112,500 (10,000) 62,500 165,000
Additional Contibution by B 10,000 10,000
Amounts received by the partners 112,500 - 62,500 175,000

Checking
 Beginning balance of cash 40,000
Net proceeds from the sale of non-cash assets 225,000
Additional Contibution by B 10,000
Less: Payment for outside creditors (100,000)
Cash available for distribution to partners 175,000

4) Computation for the gain or loss on the sale

a.) Collection on accounts receivable 40,000
b.) Sale of Inventory 70,000
c.) Sale of Equipment 130,000
d)Actual Liquidation Expenses (2,000)
e) Estimated liquidation expenses (3,000)
f) Cash retained for future expenses (10,000)
Net Cash Proceeds 225,000
Less: Carrying amount of non cash assets (1,300,000)
Total loss on sale (1,075,000)

Allocating the gain or loss to the partner’s capital balances

A(50%) B(40%) C(10%) TOTALS

Capital Balances 600,000 420,000 170,000 1,190,000
Payable to A (right of offset) 50,000 50,000
Total 650,000 420,000 170,000 1,240,000
Allocation of Loss (537,500) (430,000) (107,500) (1,075,000)
Totals 112,500 (10,000) 62,500 165,000
Allocation of capital deficiency to
The other partners (8,333) 10,000 (1,667) -
Amounts received by the partners 104,167 - 60,833 165,000

Checking

Beginning balance of cash 40,000

Net proceeds from the sale of non-cash assets 225,000
Less: Payment for outside creditors (100,000)
Cash available for distribution to partners 165,000

5.)