On the accounting for public-private partnerships relating ...
Accounting for Partnerships-4
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Transcript of Accounting for Partnerships-4
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8/10/2019 Accounting for Partnerships-4
1/21
Chapter12-1
ACCOUNTING FORACCOUNTING FOR
PARTNERSHIPSPARTNERSHIPS
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Chapter12-2
E12-8E12-8variationvariation The ARES partnership at December31 has cash $20,000, noncash assets $100,000,
liabilities $55,000, and the followin capital balances!"assandra $#5,000 and enelope $20,000% The firm isli&'idated, and $120,000 in cash is recei(ed for thenoncash assets% "assandra and enelope income ratios
are )0* and #0*, respecti(el+%Instructions:
repare a cash distrib'tion sched'le%
Liquidation of a PartnershipLiquidation of a Partnership
Liquidation of a PartnershipLiquidation of a Partnership
LO 5 Explain the effects of the entries to recordLO 5 Explain the effects of the entries to recordthe liquidation of a partnership.the liquidation of a partnership.
o "apitalDeficienc+
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Chapter12-3
E12-8E12-8variation repare a cash distrib'tion sched'le%
Liquidation of a PartnershipLiquidation of a Partnership
Liquidation of a PartnershipLiquidation of a Partnership
LO 5 Explain the effects of the entries to recordLO 5 Explain the effects of the entries to recordthe liquidation of a partnership.the liquidation of a partnership.
o "apitalDeficienc+
1 21 2
!!
""
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Chapter12-4
E12-#E12-# Data for The ARES partnership are presentedin E12-.%
repare the entries to record!
a/ The sale of noncash assets%b/ The allocation of the ain or loss on li&'idation to
the partners%
c/ a+ment of creditors%d/ Distrib'tion of cash to the partners%
Liquidation of a PartnershipLiquidation of a Partnership
Liquidation of a PartnershipLiquidation of a Partnership
LO 5 Explain the effects of the entries to recordLO 5 Explain the effects of the entries to recordthe liquidation of a partnership.the liquidation of a partnership.
o "apitalDeficienc+
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Chapter12-5
E12-#E12-# repare the entries to record! a/ The sale ofnoncash assets% b/ The allocation of the ain or loss onli&'idation to the partners% c/ a+ment of creditors% d/Distrib'tion of cash to the partners%
Liquidation of a PartnershipLiquidation of a Partnership
Liquidation of a PartnershipLiquidation of a Partnership
LO 5 Explain the effects of the entries to recordLO 5 Explain the effects of the entries to recordthe liquidation of a partnership.the liquidation of a partnership.
oncash assets 100,000"ash 120,000$a%
ain on realiation 20,000
"assandra, "apital $20,000 )0*/ 12,000ain on realiation 20,000$&%
enelope, "apital $20,000 #0*/ .,000
o "apitalDeficienc+
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Chapter12-6
E12-#E12-# repare the entries to record! a/ The sale ofnoncash assets% b/ The allocation of the ain or loss onli&'idation to the partners% c/ a+ment of creditors% d/Distrib'tion of cash to the partners%
Liquidation of a PartnershipLiquidation of a Partnership
Liquidation of a PartnershipLiquidation of a Partnership
LO 5 Explain the effects of the entries to recordLO 5 Explain the effects of the entries to recordthe liquidation of a partnership.the liquidation of a partnership.
"ash 55,0004iabilities 55,000$c%
enelope, "apital 2.,000"assandra, "apital 5,000$d%
"ash .5,000
o "apitalDeficienc+
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Chapter12-7
The first step in the li&'idation of a partnership isto!
a% allocate ain6loss on realiation to the partners%
b% distrib'te remainin cash to partners%
c% pa+ partnership liabilities%
d% sell noncash assets and reconie a ain or losson realiation%
'uestion'uestion
Liquidation of a PartnershipLiquidation of a PartnershipLiquidation of a PartnershipLiquidation of a Partnership
LO 5 Explain the effects of the entries to recordLO 5 Explain the effects of the entries to recordthe liquidation of a partnership.the liquidation of a partnership.
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Chapter12-8
Liquidation of a PartnershipLiquidation of a PartnershipLiquidation of a PartnershipLiquidation of a Partnership
LO 5 Explain the effects of the entries to recordLO 5 Explain the effects of the entries to recordthe liquidation of a partnership.the liquidation of a partnership.
Loo( pa)e 528
"apitalDeficienc+
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Chapter12-9
E12-1*E12-1* rior to the distrib'tion of cash to the partners,the acco'nts in the 78 "ompan+ are! "ash $2.,000, ewell"apital "r%/ $1,000, 7ennins "apital "r%/ $15,000, and8arle+ "apital Dr%/ $#,000% The income ratios are 5!3!2,respecti(el+%
9nstr'ctions
$a% repare the entr+ to record 1/ 8arle+:s pa+ment of$#,000 in cash to the partnership and 2/ the distrib'tion
of cash to the partners with credit balances%$&% repare the entr+ to record 1/ the absorption of8arle+:s capital deficienc+ b+ the other partners and 2/ thedistrib'tion of cash to the partners with credit balances%
Liquidation of a PartnershipLiquidation of a PartnershipLiquidation of a PartnershipLiquidation of a Partnership
LO 5 Explain the effects of the entries to recordLO 5 Explain the effects of the entries to recordthe liquidation of a partnership.the liquidation of a partnership.
"apitalDeficienc+
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8/10/2019 Accounting for Partnerships-4
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Chapter12-1
Liquidation of a PartnershipLiquidation of a PartnershipLiquidation of a PartnershipLiquidation of a Partnership
LO 5 Explain the effects of the entries to recordLO 5 Explain the effects of the entries to recordthe liquidation of a partnership.the liquidation of a partnership.
+e,ell .ennin)s /arle0ash apital apital apital
alances &efore liquidation 28***3 $14***%3 $15***%3 "***3
/arle0 pa0ent "*** $"***%
alance !2***3 $14***%3 $15***%3 -3
E12-1*E12-1* $a%
8arle+, "apital
#,000
"ash #,000$a%
7ennins, "apital 15,000ewell, "apital 1,000
"ash
32,000
"apitalDeficienc+
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Chapter12-11
Liquidation of a PartnershipLiquidation of a PartnershipLiquidation of a PartnershipLiquidation of a Partnership
LO 5 Explain the effects of the entries to recordLO 5 Explain the effects of the entries to recordthe liquidation of a partnership.the liquidation of a partnership.
+e,ell .ennin)s /arle0ash apital apital apital
alances &efore liquidation 28***3 $14***%3 $15***%3 "***3
6&sor& /arle0 deficienc0 25** 15** $"***%
alance 28***3 $1"5**%3 $1!5**%3 -3
E12-1*E12-1* $&%
7ennins, "apital 1,500ewell, "apital 2,500$&%
7ennins, "apital 13,500ewell, "apital 1#,500
"ash
2. 000
8arle+, "apital
#,000
"apitalDeficienc+
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Chapter12-12
9f a partner with a capital deficienc+ is 'nable topa+ the amo'nt owed to the partnership, thedeficienc+ is allocated to the partners with creditbalances!
a% e&'all+%
b% on the basis of their income ratios%
c% on the basis of their capital balances%d% on the basis of their oriinal in(estments%
'uestion'uestion
Liquidation of a PartnershipLiquidation of a PartnershipLiquidation of a PartnershipLiquidation of a Partnership
LO 5 Explain the effects of the entries to recordLO 5 Explain the effects of the entries to recordthe liquidation of a partnership.the liquidation of a partnership.
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Chapter12-13
6dission of a Partner6dission of a Partner6dission of a Partner6dission of a Partner
LO 7 Explain the effects of the entries ,hen a ne,LO 7 Explain the effects of the entries ,hen a ne,partner is aditted.partner is aditted.
9ll'stration 12A-1
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Chapter12-14
Purchase of a Partner8s InterestPurchase of a Partner8s InterestPurchase of a Partner8s InterestPurchase of a Partner8s Interest
Loo( pa)e 5!!-5!"Loo( pa)e 5!!-5!"
Ass'me that 4% "arson arees to pa+ $10,000 each to "%Ames and D% ;ar
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Chapter12-15
Investent of 6ssets in a PartnershipInvestent of 6ssets in a PartnershipInvestent of 6ssets in a PartnershipInvestent of 6ssets in a Partnership
Ass'me that 4% "arson arees to in(est $30,000 incash in the Ames-bar
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Chapter12-16
ithdra,al of a Partnerithdra,al of a Partnerithdra,al of a Partnerithdra,al of a Partner
LO 4 ;escri&e the effects of the entries ,hen aLO 4 ;escri&e the effects of the entries ,hen a
partner ,ithdra,s fro the fir.partner ,ithdra,s fro the fir.
A partner ma+ withdraw from a partnershipvoluntaril0, b+ sellin his or her e&'it+ in the firm%
=r, he or she ma+ withdraw involuntaril0, b+reachin mandator+ retirement ae or b+ d+in%
The withdrawal of a partner, li
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Chapter12-17
ithdra,al of a Partnerithdra,al of a Partnerithdra,al of a Partnerithdra,al of a Partner
9ll'stration 12A-)
LO 4 ;escri&e the effects of the entries ,hen aLO 4 ;escri&e the effects of the entries ,hen a
partner ,ithdra,s fro the fir.partner ,ithdra,s fro the fir.
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Chapter12-18
Pa0ent /ro Partners8 Personal 6ssetsPa0ent /ro Partners8 Personal 6ssetsPa0ent /ro Partners8 Personal 6ssetsPa0ent /ro Partners8 Personal 6ssets
Ass'me that partners >or, ead, and =dom ha(ecapital balances of $25,000, $15,000, and $10,000,respecti(el+% >or and ead aree to b'+ o't =dom:sinterest% Each of them arees to pa+ =dom $.,000 inechane for one-half of =dom:s total interest of
$10,000% The entr+ to record the withdrawal is!
ead, "apital 5,000 >or, "apital 5,000=dom, "apital 10,000
+ote that net assets and total capital reain the saeat 35****. 9he 317*** paid to Odo &0 thereainin) partners isnt recorded &0 the partnership.
Look page:537Look page:537
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Chapter12-19
Pa0ent /ro Partnership 6ssetsPa0ent /ro Partnership 6ssetsPa0ent /ro Partnership 6ssetsPa0ent /ro Partnership 6ssets
Ass'me that the followin capital balances eist in theRST partnership! Roman $50,000, Sand $30,000, andTer< $20,000% The partners share income in the ratioof 3!2!1, respecti(el+% Ter< retires from thepartnership and recei(es a cash pa+ment of $25,000
from the firm%9n this eample, a bon's is paid to the retirinpartner since the cash paid to the retirinpartner is more than his6her capital balance%
Allocate the bon's to the remainin partners on the basisof their income ratios%
LO 4 ;escri&e the effects of the entries ,hen aLO 4 ;escri&e the effects of the entries ,hen apartner ,ithdra,s fro the fir.partner ,ithdra,s fro the fir.
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Chapter12-2
Pa0ent /ro Partnership 6ssetsPa0ent /ro Partnership 6ssetsPa0ent /ro Partnership 6ssetsPa0ent /ro Partnership 6ssets
Ass'me that the followin capital balances eist in theRST partnership! Roman $50,000, Sand $30,000, andTer< $20,000% The partners share income in the ratioof 3!2!1, respecti(el+% Ter< retires from thepartnership and recei(es a cash pa+ment of $25,000
from the firm%The bon's paid to the retirin partner is$5,000, the difference between the $25,000paid to the retirin partner and his6her capital
balance%
The allocation of the $5,000 bon's is! Roman $3,000$5,000 ? 365/ and Sand $2,000 $5,000 ? 265/%
LO 4 ;escri&e the effects of the entries ,hen aLO 4 ;escri&e the effects of the entries ,hen apartner ,ithdra,s fro the fir.partner ,ithdra,s fro the fir.
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Chapter12-21
Pa0ent /ro Partnership 6ssetsPa0ent /ro Partnership 6ssetsPa0ent /ro Partnership 6ssetsPa0ent /ro Partnership 6ssets
Ass'me that the followin capital balances eist in theRST partnership! Roman $50,000, Sand $30,000, andTer< $20,000% The partners share income in the ratioof 3!2!1, respecti(el+% Ter< retires from thepartnership and recei(es a cash pa+ment of $25,000
from the firm%The @o'rnal entr+ to record the withdrawal ofTer< is as follows!
LO 4 ;escri&e the effects of the entries ,hen aLO 4 ;escri&e the effects of the entries ,hen apartner ,ithdra,s fro the firpartner ,ithdra,s fro the fir
Ter