The following balance sheet is for a partnership in which the partners have decided to terminate operations and liquidate assets. The partners estimate liquidation expenses will be $17,000.CashNoncash assetsTotal assets$ 150,000280,000$ 430,000LiabilitiesBeginning balancesPay liabilitiesMax. liquidation expensesMax. loss - noncash assetsInitial safe paymentsArch, capital (40%)130,00065,000Bibb, capital (20%)Dao, capital (40%)165,000Total liabilities and capital $430,000Prepare a proposed schedule of liquidation to carry out a preliminary distribution of partnership assets at the date of termination. (Amounts to be deducted should be entered with a minussign.)$ 70,000ARCH, BIBB, AND DAO PARTNERSHIPProposed Schedule of LiquidationDate of TerminationCashNoncashAssetsLiabilitiesArch, Capital Bibb, Capital40%20%Dao, Capital40%

When a partnership firm is dissolved, its business operations are terminated and the name of the…

Cash Noncash assets Total assets $ 150,000 280,000 $ 430,000 Liabilities Arch, capital (40%) Bibb, capital (20%) Dao, capital (40%) Total liabilities and capital $ 70,000 130,000 65,000 165,000 $430,000

Cash Noncash assets Total assets $ 150,000 280,000 $ 430,000 Liabilities Arch, capital (40%) Bibb, capital (20%) Dao, capital (40%) Total liabilities and capital $ 70,000 130,000 65,000 165,000 $430,000

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter14: Partnerships And Limited Liability Entities

Section: Chapter Questions

Problem 2BD

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Question

The following balance sheet is for a partnership in which the partners have decided to terminate operations and liquidate assets. The partners estimate liquidation expenses will be $17,000.
Cash
Noncash assets
Total assets
$ 150,000
280,000
$ 430,000
Liabilities
Beginning balances
Pay liabilities
Max. liquidation expenses
Max. loss - noncash assets
Initial safe payments
Arch, capital (40%)
130,000
65,000
Bibb, capital (20%)
Dao, capital (40%)
165,000
Total liabilities and capital $430,000
Prepare a proposed schedule of liquidation to carry out a preliminary distribution of partnership assets at the date of termination. (Amounts to be deducted should be entered with a minus
sign.)
$ 70,000
ARCH, BIBB, AND DAO PARTNERSHIP
Proposed Schedule of Liquidation
Date of Termination
Cash
Noncash
Assets
Liabilities
Arch, Capital Bibb, Capital
40%
20%
Dao, Capital
40%

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