Lui, Montavo, and Johnson plan to liquidate their Premium Pool and Spa business. They have always shared profit and losses in a 1:4:5 ratio, and on the day of the liquidation their balance sheet appeared as follows:
 

Premium Pool and Spa
Balance Sheet
June 30, 2023 Assets             Cash       $ 76,250   Machinery $ 610,750         Less: Accumulated depreciation   148,000     462,750   Total assets       $ 539,000   Liabilities             Accounts payable       $ 146,000   Equity             Jim Lui $ 77,400         Kent Montavo, capital   202,000         Dave Johnson, capital   113,600         Total equity         393,000   Total liabilities and equity       $ 539,000  

Required:
1. Under the assumption that the machinery is sold and the cash is distributed to the proper parties on June 30, 2023, complete the schedule provided below. Show the sale, the gain or loss allocation, and the distribution of the cash in each of the following unrelated cases:

a. The machinery is sold for $510,000. (Negative answers should be indicated by a minus sign.)

b. The machinery is sold for $397,000. (Negative answers should be indicated by a minus sign.)

c. The machinery is sold for $202,000, and any partners with resulting deficits can and do pay in the amount of their deficits. (Negative answers should be indicated by a minus sign.)

d. The machinery is sold for $209,000, and the partners have no assets other than those invested in the business. (Negative answers should be indicated by a minus sign.)

2. Prepare the entry to record the final distribution of cash assuming the machinery is sold for $510,000.

 

Kendra, Cogley, and Mei share income and loss in a 3:2:1 ratio. Thepartners have decided to liquidate their partnership. On the day ofliquidation their balance sheet appears as follows.

Required:
For each of the following scenarios, complete the scheduleallocating the gain or loss on the sale of inventory. Preparejournal entries to record the below transactions. (Do not round intermediate calculations. Amounts to be deducted orLosses should be entered with a minus sign. Round your finalanswers to the nearest whole dollar.)

(1) Inventory is sold for $627,000.
(2) Inventory is sold for $464,400.
(3) Inventory is sold for $334,200 and any partners withcapital deficits pay in the amount of their deficits.
(4) Inventory is sold for $273,600 and the partners haveno assets other than those invested in the partnership.

The ABC partnership reports the following condensed balance sheet: Cash $2,020,000 Liabilities $1,800,000 Noncash assets 3,670,000 Partner A, capital 1,750,500 Partner B, capital 1,750,500 Partner C, capital 389,000 Total assets $5,690,000 Total liabilities and partner capital $5,690,000 The partners wish to liquidate the partnership. The noncash assets are sold for $2,500,000 with the loss distributed to the partners in the ratio of 30%/30%/40% to partner A, B, and C, respectively. The liabilities are paid in full. Partners make any capital contribution that is necessary to offset a negative balance in their respective Capital Accounts. Required: Prepare a schedule detailing the liquidation of the assets, repayment of the liabilities, and distribution of the remaining cash to the partners.

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