[shery28]

Im here again..

hope you'll help me again...

I'll appreciate it a lot!

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The partnership of Wilson, Yuson and Zapata is winding up its affairs. The partners share profits and losses as follows: Wilson, 50%, Yuson, 30%; and Zapata, 20%.

The partners are considering an offer of $100,000 for the Accounts Receivable, Inventory, and Plant and Equipment as of June 30. The $100,000 would be paid to the partners in installments, the number and amounts of which are to be negotiated.

The trial balance of the partnership on June 30, 2008 is as follows:

Cash 6,000
Accounts Receivable 22,000
Inventory 14,000
Plant and Equipment (net) 99,000
Receivable from Wilson 12,000
Receivable from Zapata 7,500
Accounts Payable 17,000
Wilson, Capital 67,000
Yuson, Capital 45,000
Zapata, Capital 31,500
160,500 160,500


(1.) Prepare a cash distribution schedule as of June 30, 2008, showing how the $100,000 would be distributed as it becomes available.

(2.) Assume the same facts as in (1) except that, instead of accepting the offer of $100,000, the partners decide to liquidate their partnership. Cash is distributed to the partners at the end of each month.


A summary of the liquidation transactions follow:

July $16,500 Collected on accounts receivable; balance is uncollectible
$10,000 Received for the entire inventory
$ 1,000 Liquidation expenses paid
$ 8,000 Cash retained in the business at the end of the month

August $ 1,500 Liquidation expenses paid
As part of capital, Zapata accepted a piece of special
equipment which had a book value of %4,000. The partners
agreed that a value of $10,000 should be placed on the
machine for liquidation purposes.
$ 2,500 Cash retained in the business at the end of the month

September $75,000 Received on sale of remaining plant and equipment
$ 1,000 Liquidation expenses paid. No cash retained in the business


(3.) Prepare a schedule of cash payments as of September 30, 2008, showing how the cash was actually distributed.



-----------------> I'm so sorry if the problem is very long, hope you can try to help me, I'm very confused with this problem there's so many conditions. Please help me... please...

[rehmanvohra]

I will show you how to solve it.
1. Prepare a schedule of assets, liabilities and equity - refer text book
2. Insert balances as they appear in the balance sheet
3. Transfer debit balances of partners to their capital accounts
4. Bring the capital account balances in their profit sharing ratios
5. Increase cash 100,000, reduce assets accounts and charge the resulting loss to capital accounts
6. You have now 106,000 cash of which pay off payable and the rest is distributed to partners

The same treatment for part 2 but at each stage, calculate loss after each collection as if no further proceeds will be received. Pay off accounts payable, leave a balance as required and pay off the partners