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September 15, 2014

Homework Help: accounting

Posted by mayasa on Thursday, April 8, 2010 at 5:55pm.

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.

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