Acc407 Modern Advanced Accounting: P3.7 The following balance sheet was prepared for Haye & Lee LLP

Acc407 Modern Advanced Accounting
Part of Week 1 Assignment

Problem 3.7
The following balance sheet was prepared for Haye & Lee LLP immediately prior to liquidation:
Haye & Lee LLP
Balance Sheet (unaudited)
March 31, 2005
Assets Liabilities and Partners' Capital
Cash 10,000 Liabilities 27,000
Investments in marketable equity securities (available for sale) 44,000 Haye, Capital 72,000
Lee, Capital 31,000
Other Assets 100,000 Accumulated Other Comprehensive Income 24,000
Total 154,000 Total 154,000

Haye and Lee shares operating income or losses in a 2: 1 ration and gains and losses on investments in a 3: 1 ratio. The transactions and events to complete the liquidation were as follows:
Apr, 01 Haye withdrew the marketable equity securities at the agreed current fair value of $44,000.
Apr, 03 Other assets and the trade name, Haley's were sold to Wong Products for $200,000 face amount of $12% bonds with a current fair value of $180,000. The gain on this transaction was an investment gain. The bonds were classifies as available for sale.
Apr, 07 Wong Products 12% bonds with a face amount of $40,000 were sold for $35,600 cash. The loss on this transaction was an investment loss.
Apr, 08 Liabilities were paid.
Apr, 10 Haye withdrew $100,000 face amount and Lee withdrew $60,000 face maount of Wong Products 12% bonds at carrying amounts.
Apr, 15 Available cash was paid to Haye and to Lee.

Instructions: Prepare journal entries for Haye & Lee LLP to record the foregoing transactions and the events. Disregard interest on the bonds of Wong Products.
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