Tuesday, 29 October 2019

Baker, Strong, and Weak have called on you to assist them in winding up the affairs of their partnership. You

Baker, Strong, and Weak have called on you to assist them in winding up the affairs of their partnership. You are able to gather the following information.

1. The trial balance of the partnership at June 30, 2014, is as follows.


Debit
Credit
Cash
$6,000

Accounts Receivable
22,000

Inventory
14,000

Plant and Equipment (net)
99,000

Baker, Advance
12,000

Weak, Advance
7,500

Accounts Payable


$17,000
Baker, Capital


67,000
Strong, Capital


45,000
Weak, Capital


31,500
   Total
$160,500
$160,500
2. The partners share profits and losses as follows: Baker, 40%; Strong, 40%; and Weak, 20%.

3. 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.
a.Prepare an advance cash distribution plan as of June 30, 2014.
b. Prepare a schedule to show how the potential cash ($106,000) would be distributed as it becomes available.

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