Reference no: EM133032051

Questions -

Q1. Anna, Bobby, and Gerry are partners who have capital balances of $480,000, $500,000 and $180,000 respectively. Profit or loss is distributed in the ratio of 4:2:1. Bobby received $260,000 as a result of liquidating the partnership when 60% of the noncash assets of the partnership is realized. The partnership has total assets totaling to $500,000 including $50,000 cash before liquidation. The partnership also incurred $35,000 liquidation expenses and withheld $28,000 for the unpaid liabilities of the partnership. How much is the loss on realization of noncash assets?

a. 632,000

b. 875,000

c. 855,000

d. 612,000

Q2. Because they are unable to pay debts, TJ Corporation has been forced into bankruptcy as of April 30, 2021. The statement of financial position on that date shows:

Assets		Liabilities
Cash	2,700	Accounts Payable	52,500
Accounts Receivable	39,350	Notes Payable - PNB	15,000
Notes Receivable	18,500	Notes Payable - Suppliers	51,250
Inventories	87,850	Accrued Wages	1,850
Prepaid Expenses	950	Accrued Taxes	4,650
Land and Buildings	61,250	Mortgage Bond Payable	90,000
Equipment	48,800	Ordinary Share - P100 par	75,000
Total	259,400	Accumulated Profit (deficit)	(30,850)
		Total	259,400

Accounts receivable of $16,110 and notes receivable of $12,500 are expected to be collectible. The good notes are pledged to Phil. National Bank. Inventories are expected to bring in $45,100 when sold under bankruptcy conditions. Land and building have an appraised value of $95,000. They serve a security on the bonds. The current value of the equipment, net of disposal cost is $9,000. What is the expected recovery percentage?

a. 67%

b. 50%

c. 47%

d. 48%

Q3. Gummy, Jennifer, and Bella are partners who decided to terminate their partnership due to misunderstanding. Total assets of the partnership is $480,000 including cash of $30,000. Capital balances of the partners were as follows Gummy $150,000; Jennifer $175,000; Bella $67,500. Unpaid liabilities amounted to $87,500. Assets with a book value of $175,000 were sold for $125,000 and the cash was distributed. The profit or loss ratio is 5:3:2. How much must the remaining assets be sold in order for Jennifer to receive $197,500 after liquidation?

Q4. Blake, Paris, and Myra formed a partnership. Their capital balances showed the following: Blake, Capital - $252,000; Paris, Capital - $126,000; Myra, Capital - $42,000. Their profit and loss ratio are 6:3:1. The partners decide to sell 20% of their interest to Vanya for a total payment of $120,000. Vanya will pay the money directly to the other partners. What amount was the bonus debited or credited in partner Blake's capital account?