Reference no: EM133047367
Questions -
Q1. An entity that was to be liquidated had the following information regarding its liabilities:
Income Taxes - $10,000
Notes Payable Secured by Land - 100,000
Accounts Payable - 251,050
Salaries Payable - 12,950
Administrative Expenses for Liquidation - 20,000
The entity had the following assets:
|
|
Book Value
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Fair Value
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|
Current Assets
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$100,000
|
$95,000
|
|
Land
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50,000
|
75,000
|
|
Building
|
150,000
|
200,000
|
a. How much is the total net free assets?
b. How much is the total payment to unsecured creditors?
Q2. Ba, Bi, and Bo formed a joint venture in 2010 to sell clothes. They assigned Bi as the manager of the joint venture. They agreed to divide profits equally. They terminated the venture on December 21, 2011 with unsold merchandise. On this date, Bi's trial balance shows the following account balances before profit distribution: Debits: Joint Venture Cash $90,000, Joint Venture $23,500, Bo, Capital $15,600. Credit: Ba, Capital $32,500. Bi received $5,300 as her share in the joint venture profit. Bi agreed to be charged for the unsold merchandise as of December 31, 2010. What is the amount due to Ba upon final settlement?