Acct240 Financial Accounting: P12-3B The partners in Apache Company

Acct240 Financial Accounting
P12-3B
The partners in Apache Company decide to liquidate the following.
Apache Company
Balance Sheet
April 30, 2010

Assets Liabilities
Cash 30,000 Notes payable 20,000
Accounts Receivable 25,000 Accounts payable 30,000
Allowance for doubtful accounts (2,000) Wage payable 2,500
Merchandise inventory 35,000 Scottie, Capital 28,000
Equipment 20,000 Spock, Capital 13,650
Accumulated depreciation - equipment (8,000) Kirk, Capital 5,850
Total 100,000 Total 100,000

The partners share income and loss 5:3:2. During the process of liquidation, the transactions below were completed in the following consequence.

a. A total of $57,000 was received from converting noncash assets in cash.
b. Gain or loss on realization was allocated to partners.
c. Liabilities were paid in full.
d. Cash was paid to the partners with credit balances.

Instructions:
a. Prepare a schedule of cash payments
b. Prepare the entries to record the transactions.
c. Post to the cash and capital accounts.
Powered by