CHAPTER 12 Accounting for Partnerships and Limited Liability Companies
Ex. 12-18
a. Cash balance………………………………………………
…
$ 35,000
Sum of capital accounts…………………………………
…
(46,000)
Loss on realization………………………………………… $ 11,000
Hewitt Patel
Ex. 12-19
Oliver Ansari Total
Capital balances before realization………
…
$ 28,000 $ 35,000 $63,000
Division of gain on realization
[($67,000 – $63,000) ÷ 2]…………………
…
2,000 2,000
…
Ex. 12-20
a. Deficiency
b. $97,500 ($73,500 + $41,000 – $17,000)
c. Cash
Fowler, Capital
17,000
17,000
…
…
…
…
CHAPTER 12 Accounting for Partnerships and Limited Liability Companies
Ex. 12-21
a. $975 [$1,500 – ($225 + $300)]
b. Cash should be distributed as indicated in the following tabulation:
c. Mapes has a capital deficiency of $75, as indicated in the following
tabulation:
Bray Lincoln Mapes Total
Capital invested…………
…
$225 $300 $ — $ 525
Net loss……………………
…
(75) (75) (75) (225)
Capital balances…………
…
$150 $225 $(75) $ 300
*
$300 – $525
Ex. 12-22
Dr.
*
…
CHAPTER 12 Accounting for Partnerships and Limited Liability Companies
Ex. 12-23
Noncash Silver Carillo Tingley
Cash Assets Liabilities (3/6) (2/6) (1/6)
Balances before realization $ 72,500 $ 124,200 $ 41,300 $ 77,700 $ 51,800 $ 25,900
Sale of assets and division of loss 116,400 (124,200) —(3,900) (2,600) (1,300)
Silver, Carillo, and Tingley
Statement of Partnership Liquidation
For Period July 1–29
+ = +++
Capital
CHAPTER 12 Accounting for Partnerships and Limited Liability Companies
Ex. 12-24
a.
Noncash Lester Torres Hearst
Cash Assets Liabilities (2/5) (2/5) (1/5)
Balances before realization $ 26,000 $ 146,000 $ 35,000 $ 49,000 $ 61,000 $ 27,000
Sale of assets and division of gain 158,000 (146,000) —4,800 4,800 2,400
b. Lester, Member Equity
Torres, Member Equity
Hearst, Member Equity
Cash
53,800
Arcadia Sales, LLC
Statement of LLC Liquidation
For Period August 1–31
+
Member Equity
=+++
65,800
29,400
149,000
CHAPTER 12 Accounting for Partnerships and Limited Liability Companies
Ex. 12-25
a. (1) Revenues
Expenses 570,000
Lorraine Grecco, Capital
Carrie Rosenfeld, Capital
b.
Total
Balances, January 1, 20Y4 $163,000
Additional investment during the year 11,000
For the Year Ended December 31, 20Y4
$ 99,000
—
Rosenfeld
654,000
Lorraine
Grecco
42,000
42,000
$ 64,000
11,000
Carrie
Grecco and Rosenfeld
Statement of Partnership Equity
CHAPTER 12 Accounting for Partnerships and Limited Liability Companies
Ex. 12-26
$19,900,000,000
79,347
b. The revenues increased between the two years from $18.6 billion to $19.9 billion, or
7.0% [($19.9 – $18.6) ÷ $18.6]. However, the number of employees has increased
Ex. 12-27
$27,270,000
135
$31,140,000
180
a. =
=Revenue per professional staff, current year: $250,797
a.
=
Revenue per employee, 20Y9:
Revenue per employee, 20Y8:
$202,000
$173,000
CHAPTER 12 Accounting for Partnerships and Limited Liability Companies
Prob. 12-1A
1. Mar. 1 Cash 23,400
Merchandise Inventory 62,600
Eric Keene, Capital 86,000
1 Cash 39,000
Accounts Receivable 19,500
2.
Current assets:
Cash $62,400
Accounts receivable $19,500
Less allowance for doubtful accounts 1,400 18,100
Merchandise inventory 62,600
Total current assets $143,100
Property, plant, and equipment:
Equipment 55,400
Total assets $198,500
*
$23,400 + $39,000
Assets
PROBLEMS
Keene and Wallace
Balance Sheet
March 1, 20Y8
*
CHAPTER 12 Accounting for Partnerships and Limited Liability Companies
Prob. 12-1A (Concluded)
28 Eric Keene, Capital 19,000
Renee Wallace, Capital 24,000
Eric Keene, Drawing 19,000
Renee Wallace, Drawing 24,000
* Computations:
Total
Keene Wallace
12
CHAPTER 12 Accounting for Partnerships and Limited Liability Companies
Prob. 12-2A
Plan Black Shannon Black Shannon
a. ……………………………………
…
$138,000 $138,000 $240,000 $240,000
b. ……………………………………
…
207,000 69,000 360,000 120,000
c. ……………………………………
…
92,000 184,000 160,000 320,000
Details:
a. Net income (1:1)………………
…
$138,000 $138,000 $240,000 $240,000
b. Net income (3:1)………………
…
$207,000 $69,000 $360,000 $120,000
c. Net income (1:2)………………
…
$92,000 $184,000 $160,000 $320,000
…
…
…
…
f. Interest allowance……………
…
$ 21,600 $ 7,200 $ 21,600 $ 7,200
Salary allowance………………
…
96,000 168,000 96,000 168,000
Bonus allowance………………
…
2,400 43,200
Excess of allowances over
income (1:1)…………………
…
(9,600) (9,600)
$276,000 $480,000
(1) (2)
$276,000 $480,000
Black Shannon Black Shannon
34
…
…
…
CHAPTER 12 Accounting for Partnerships and Limited Liability Companies
Prob. 12-3A
1.
Professional fees
Operating expenses:
Salary expense
Depreciation expense—building
Division of net income:
Total
Salary allowance……………………………… $45,000 $54,700 $ 99,700
*
$135,000 × 10%
**
($88,000 – $10,000) × 10%
2.
Balances, January 1, 20Y3
Yost
Total
$ 78,000 $ 213,000
$135,000
JaylaTyler
Tyler
Lambert
Jayla
$154,500
15,700
Lambert and Yost
Income Statement
For the Year Ended December 31, 20Y3
$395,300
Lambert Yost
Lambert and Yost
Statement of Partnership Equity
For the Year Ended December 31, 20Y3
CHAPTER 12 Accounting for Partnerships and Limited Liability Companies
Prob. 12-3A (Concluded)
3.
Current assets:
Land $120,000
Building $157,500
Less accumulated depreciation 67,200 90,300
Office equipment $ 63,600
Less accumulated depreciation 21,700 41,900
Total property, plant, and equip. 252,200
Total assets $336,000
Lambert and Yost
Balance Sheet
December 31, 20Y3
Assets
CHAPTER 12 Accounting for Partnerships and Limited Liability Companies
Prob. 12-4A
1. June 30 Asset Revaluations 2,900
Accounts Receivable 2,500
Allowance for Doubtful Accounts 400
[($42,500 – $2,500) × 5%] – $1,600.
30 Accumulated Depreciation—Equipment 43,100
Equipment 24,800
Asset Revaluations 18,300
$155,700 – $180,500.
30 Asset Revaluations 20,000
Musa Moshref, Capital 10,000
Shaniqua Hollins, Capital 10,000
*
The asset revaluations account has a credit balance of ($2,900 – $4,600 – $18,300), which is
allocated to Moshref’s and Hollins’ capital accounts equally.
*
CHAPTER 12 Accounting for Partnerships and Limited Liability Companies
Prob. 12-4A (Concluded)
3.
Current assets:
Cash1$ 53,000
Accounts receivable $40,000
Less allowance for doubtful accounts 2,000 38,000
Current liabilities:
Accounts payable $ 21,300
Notes payable 35,000
Total liabilities $ 56,300
1$8,000 + $45,000
2$120,000 + $10,000
3$85,000 + $10,000 – $70,000
Moshref, Hollins, and Anderson
Balance Sheet
July 1, 20Y7
Assets
Partners’ Equity
Liabilities
CHAPTER 12 Accounting for Partnerships and Limited Liability Companies
Prob. 12-5A
1.
Noncash Gerloff Chu Jewett
Cash Assets Liabilities (2/4) (1/4) (1/4)
Balances before realization $ 5,200 $ 55,900 $ 15,000 $ 19,300 $ 4,500 $ 22,300
a. Sale of assets and division of loss 34,300 (55,900) —(10,800) (5,400) (5,400)
d. Cash distributed to partners (25,400) ——
(8,500) —(16,900)
Final balances $0 $0$0$0$0$0
The $900 deficiency of Chu would be divided between the other partners, Gerloff and Jewett, in their income-sharing ratio
(2:1, respectively). Therefore, Gerloff would absorb two-thirds of the $900 deficiency, or $600, and Jewett would absorb
one-third of the $900 deficiency, or $300.
b. William Gerloff, Capital*
*$8,500 – $600
** $16,900 – $300
Gerloff, Chu, and Jewett
Statement of Partnership Liquidation
For Period February 3–28
+=
Capital
+++
7,900
CHAPTER 12 Accounting for Partnerships and Limited Liability Companies
Prob. 12-6A
1. a.
Noncash Bowes Simmons Ahmed
Cash Assets Liabilities (2/5) (2/5) (1/5)
Balances before realization $ 38,000 $ 152,000 $ 24,000 $ 69,000 $ 85,000 $ 12,000
Sale of assets and division of gain 185,000 (152,000) —13,200 13,200 6,600
Bowes, Simmons, and Ahmed
Statement of Partnership Liquidation
For Period November 1–30
Capital
++=++