I've solved most of the problem below, however I'm confused about the kind of information they need in the second part:
Prepare the entry to allocate Snider's debit balance to Mantle and Mays.
Prepare the entry to record the final distribution of cash.
Account/Description Debit Credit
1. I put here
Cash (Dr) 56,110 (thats 55,310+800)
Depreciation(Dr.) 5,370
loss of realization (Cr.) 19,200
I wasn't sure what to put in here:
2. ? ?
? ?
? ?
And in the first part where it says: Post to the cash and capital accounts:
cash, I put
Bal.27,700 (3)44,230
(1)55,310 (5)39,580
(4) 800
83,610 ?
M. Mantle, Capital
(2)9,600 Bal. 33,300
(5)39,580
? 23,730
M. Mays, Capital
(2)5,760 Bal. 21,610
(5)39,580
? 15,850
M. Snider, Capital
(2)3,840 Bal. 3,840
(4)800
? 0
Also,please let me know if the part solved is correct too. Thanks
The problem:
The partners in New Yorker Company decide to liquidate the firm when the balance sheet shows the following.
NEW YORKER COMPANY
Balance Sheet
May 31, 2010
Assets
Liabilities and Owners' Equity
Cash $27,700 Notes payable $13,140
Accounts receivable 24,790 Accounts payable 27,210
Allowance for doubtful accounts (1,110) Wages payable 3,880
Merchandise inventory 34,830 M. Mantle, Capital 33,330
Equipment 21,370 W. Mays, Capital 21,610
Accumulated depreciation-equipment
(5,370)
D. Snider, Capital
3,040
Total
$102,210
Total
$102,210
The partners share income and loss 5 : 3 : 2. During the process of liquidation, the following transactions were completed in the following sequence.
A total of $55,310 was received from converting noncash assets into cash.
Gain or loss on realization was allocated to partners.
Liabilities were paid in full.
D. Snider paid his capital deficiency.
Cash was paid to the partners with credit balances.
Post to the cash and capital accounts.
Cash
Bal. (3)
(1) (5)
(4)
M. Mantle, Capital
(2) Bal.
(5)
W. Mays, Capital
(2) Bal.
(5)
D. Snider, Capital
(2) Bal.
(4)
Assume that Snider is unable to pay the capital deficiency.(For multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, 2.)
Prepare the entry to allocate Snider's debit balance to Mantle and Mays.
Prepare the entry to record the final distribution of cash.
Account/Description Debit Credit
1.
2.
Prepare the entries to record the transactions. (For multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, 2.)
Account/Description Debit Credit
1.
(To record realization of noncash assets)
2.
(To allocate gain (loss) to partner's capital accounts)
3.
(To record payment of liabilities)
4.
(To record receipt of cash from D. Snider on account of capital deficiency.)
5.