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Homework answers / question archive / The partners in Wildhorse Company decide to liquidate the firm when the balance sheet shows the following

The partners in Wildhorse Company decide to liquidate the firm when the balance sheet shows the following

Accounting

The partners in Wildhorse Company decide to liquidate the firm when the balance sheet shows the following. Assets Cash Accounts receivable Allowance for doubtful accounts Inventory Equipment Accumulated depreciation-equipment Wildhorse Company Balance Sheet May 31, 2020 Liabilities and Owners' Equity $28,200 Notes payable $13,300 24,800 Accounts payable 27,400 (1,100) Salaries and wages payable 4,300 34,900 A. Jamison, capital 34,000 20,800 S. Moyer, capital 20,300 (5,900) P. Roper, capital 2.400 $101,700 $101,700 The partners share income and loss 5:3:2. During the process of liquidation, the following transactions were completed in the following sequence. 1. A total of $55,100 was received from converting noncash assets into cash. 2. Gain or loss on realization was allocated to partners. 3. Liabilities were paid in full. 4. P. Roper paid his capital deficiency. 5. Cash was paid to the partners with credit balances. Prepare the entries to record the transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit 1. 2.
> 3. 4. 5. LINK TO TEXT Post to the cash and capital accounts. (Post entries in the order of journal entries presented in the previous part. If ending balance is O enter 0 in the column for the normal balance for the account.) Cash S. Moyer, Capital A. Jamison, Capital
P. Roper, Capital V LINK TO TEXT Assume that Roper is unable to pay the capital deficiency. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) (1) Prepare the entry to allocate Roper's debit balance to Jamison and Moyer. (2) Prepare the entry to record the final distribution of cash. No. Account Titles and Explanation Debit Credit 1. 2. Click if you would like to Show Work for this question: Open Show Work

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General Journal

So.No Account Title and Explanation Debit Credit
1 Cash $55,100  
  Allowance for Doubtful Account $1,100  
  Accumulated Depreciation -Equipment $5,900  
  Loss on Realisation * $18,400  
  Accounts Receivable   $24,800
  Inventory   $34,900
  Equipment   $20,800
2 A.Jamison Capital ($18,400× 5/10) $9,200  
  S.Moyer Capital ($18,400× 3/10) $5,520  
  P.Roper Capital ($18,400×2/10) $3,680  
  Loss on Realization   $18,400
3 Note Payable $13,300  
  Accounts Payable $27,400  
  Salaries & Wages Payable $4,300  
  Cash   $45,000
4 Cash $1,280  
  P.Roper Capital ($3,680- $2,400)   $1,280
5 A.Jamison Capital ($34,000-$9,200) $24,800  
  S.Moyer Capital ($20,300-$5,520) $14,780  
  Cash   $39,580

Explanation.

*1. Non Cash Asset (net) $ 73,500

less : Sales Proceeds $ 55,100

Loss on sale of non cash asset = $18,400

(b)

  cash  
bal 28,200 3 $45,000
1 55,100 5 $39,580
4 $1,280    
  84,580   84,580
  A.Jamison  
2 $9,200 bal $34,000
5 $24,800    
       
  34,000   34,000
  S.Moyer  
2 $5,520 bal $20,300
5 $14,780    
       
  $20,300   $20,300
  P.Roper  
2 $3,680 bal $2,400
    4 $1,280
       
  $3,680   $3,680

(c)

A.Jamison Capital ($1,280*5/8) A/c 800    
S.Moyer capital ($1,280*3/8) A/c 480    
To P. Roper Capital A/c   1280  
       
A.Jamison Capital ($24,800 - 800) 24,000    
S.Moyer capital ($14,780 - 480) 14,300    
To Cash   38,300  

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