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Kendra, Cogley, and Mei share income and loss in a 3:2:1 ratio. The partners hav

ID: 2590235 • Letter: K

Question

Kendra, Cogley, and Mei share income and loss in a 3:2:1 ratio. The partners have decided to liquidate their partnership. On the day of liquidation their balance sheet appears as follows.

KENDRA, COGLEY, AND MEI
Balance Sheet
May 31

Assets

Liabilities and Equity

Cash

$

100,000

Accounts payable

$

254,000

Inventory

537,000

Kendra, Capital

76,600

Cogley, Capital

172,350

Mei, Capital

134,050

Total assets

$

637,000

Total liabilities and equity

$

637,000

Required:
For each of the following scenarios, complete the schedule allocating the gain or loss on the sale of inventory. Prepare journal entries to record the below transactions. (Do not round intermediate calculations. Amounts to be deducted or Losses should be entered with a minus sign. Round your final answers to the nearest whole dollar.)

(1) Inventory is sold for $615,600.
(2) Inventory is sold for $477,600.
(3) Inventory is sold for $353,400 and any partners with capital deficits pay in the amount of their deficits.
(4) Inventory is sold for $279,600 and the partners have no assets other than those invested in the partnership.
  

Complete this question by entering your answers in the tabs below.

Required 1 Inventory

Complete the schedule allocating the gain or loss on the sale of inventory is $615,600.

Step 1) Determination of Gain (Loss)

Proceeds from the sale of inventory

$615,600

Inventory cost

537,000

Gain on sale

$78,600

Step 2) Allocation of the Gain (Loss) to the Partners.

KENDRA

COGLEY

MEI

Total

Initial capital balances

$76,600

$172,350

$134,050

$383,000

Allocation of gains (losses)

3 / 6

2 / 6

1 / 6

             0

Capital balances after gains (losses)

$76,600

$172,350

$134,050

$383,000

· Required 1 GJ

Journal entry worksheet

Record the sale of inventory.

Transaction

General Journal

Debit

Credit

(a)

Journal entry worksheet

Allocate the gain(loss) on the sale of inventory to the partners.

Transaction

General Journal

Debit

Credit

(b)

Journal entry worksheet

Record the payment of the liabilities.

Transaction

General Journal

Debit

Credit

(c)

Journal entry worksheet

Record the disbursement of the remaining cash to the partners.

Transaction

General Journal

Debit

Credit

(d)

Required 2 Inventory

Complete the schedule allocating the gain or loss on the sale of inventory is $477,600.

Step 1) Determination of Gain (Loss)

Proceeds from the sale of inventory

$477,600

Inventory cost

Step 2) Allocation of the gain (Loss) to the Partners.

KENDRA

COGLEY

MEI

Total

Initial capital balances

$76,600

$172,350

$134,050

$383,000

Allocation of gains (losses)

3 / 6

2 / 6

1 / 6

             0

Capital balances after gains (losses)

$76,600

$172,350

$134,050

$383,000

Required 2 GJ

Prepare journal entries to record the inventory is sold for $477,600.

No

Transaction

General Journal

Debit

Credit

Journal entry worksheet

Record the sale of inventory.

Transaction

General Journal

Debit

Credit

(a)

Journal entry worksheet

Allocate the gain(loss) on the sale of inventory to the partners.

Transaction

General Journal

Debit

Credit

(b)

Journal entry worksheet

Record the payment of the liabilities.

Transaction

General Journal

Debit

Credit

(c)

Journal entry worksheet

Record the disbursement of the remaining cash to the partners..

Transaction

General Journal

Debit

Credit

(d)

Required 3 Inventory

Complete the schedule allocating the gain or loss on the sale of inventory is $353,400 and any partners with capital deficits pay in the amount of their deficits.

Step 1) Determination of Gain (Loss)

Proceeds from the sale of inventory

$353,400

Inventory cost

Step 2) Allocation of the Gain (Loss) to the Partners.

KENDRA

COGLEY

MEI

Total

Initial capital balances

$76,600

$172,350

$134,050

$383,000

Allocation of gains (losses)

3 / 6

2 / 6

1 / 6

0

Capital balances after gains (losses)

$76,600

$172,350

$134,050

$383,000

Required 3 GJ

Prepare journal entries to record the inventory is sold for $353,400 and any partners with capital deficits pay in the amount of their deficits.

No

Transaction

General Journal

Debit

Credit

Required 4 Inventory

Complete the schedule allocating the gain or loss on the sale of inventory $279,600 and the partners have no assets other than those invested in the partnership.

Step 1) Determination of gain (loss)

Proceeds from the sale of inventory

$279,600

Inventory Cost

Step 2) Allocation of the gain (loss) to the partners and distribution of deficit(s)

KENDRA

COGLEY

MEI

Total

Initial capital balances

$76,600

$172,350

$134,050

$383,000

Allocation of gains (losses)

             0

Capital balances after gains (losses)

76,600

172,350

134,050

383,000

            0

Capital balances after deficit allocation

$76,600

$172,350

$134,050

$383,000

Required 4 GJ

Prepare journal entries to record the inventory is sold for $279,600 and the partners have no assets other than those invested in the partnership.

No

Transaction

General Journal

Debit

Credit

Journal entry worksheet

Record the sale of inventory for $279,600.

Transaction

General Journal

Debit

Credit

(a)

Journal entry worksheet

Record the allocation of the gain or loss on the sale of inventory to the partners.

Transaction

General Journal

Debit

Credit

Transaction

General Journal

Debit

Credit

(c)

Journal entry worksheet

Record the payment of the liabilities.

Transaction

General Journal

Debit

Credit

(d)

Journal entry worksheet

Record the disbursement of the remaining cash to the partner(s).

Transaction

General Journal

Debit

Credit

(e)

KENDRA, COGLEY, AND MEI
Balance Sheet
May 31

Assets

Liabilities and Equity

Cash

$

100,000

Accounts payable

$

254,000

Inventory

537,000

Kendra, Capital

76,600

Cogley, Capital

172,350

Mei, Capital

134,050

Total assets

$

637,000

Total liabilities and equity

$

637,000

Required:
For each of the following scenarios, complete the schedule allocating the gain or loss on the sale of inventory. Prepare journal entries to record the below transactions. (Do not round intermediate calculations. Amounts to be deducted or Losses should be entered with a minus sign. Round your final answers to the nearest whole dollar.)

(1) Inventory is sold for $615,600.
(2) Inventory is sold for $477,600.
(3) Inventory is sold for $353,400 and any partners with capital deficits pay in the amount of their deficits.
(4) Inventory is sold for $279,600 and the partners have no assets other than those invested in the partnership.
  

Complete this question by entering your answers in the tabs below.

Required 1 Inventory

Complete the schedule allocating the gain or loss on the sale of inventory is $615,600.

Explanation / Answer

1 If Invetory is Sold for the $615600/- Amount $ S.No Transaction Debit   Credit a Cash A/c Dr       615,600 To Inventory A/c       537,000 To Realisation A/c        78,600 Being Sale of Invetory for Profit of $78600 b Realisation A/c Dr        78,600 To Kendra Capital A/c        39,300 To Cogley Capital A/c        26,200 To Mei Capital A/c        13,100 Being Distrivution of prodit to the Partners in the ratio of 3:2:1 c Accounts Payable A/c Dr       254,000 To Cash A/c       254,000 Being Cash paid for the accounts payable d Kendra Capital A/c Dr 115900 Cogley Capital A/c Dr 198550 Mei Capital A/c Dr 147150 To Cash A/c       461,600 Being Balance Cash paid to the Partners by adjusting the Capital Accounts Amount $ 3:02:01 Kendra Cogley Mei Capital        76,600       172,350       134,050        39,300        26,200        13,100 Capital       115,900       198,550       147,150 115900 198550 147150 Cash Statement Opening 100000 Sale of Invetory       615,600 Amount Paid for Payable     (254,000) Balance 461600 II If Invetory is Sold for the $477600/- Amount $ S.No Transaction Debit   Credit a Cash A/c Dr       477,600 Realisation A/c Dr        59,400 To Inventory A/c       537,000 Being Sale of Invetory for Loss of $59400 b Kendra Capital A/c        29,700 Cogley Capital A/c        19,800 Mei Capital A/c          9,900 To Realisation A/c Dr        59,400 Being Distrivution of Loss to the Partners in the ratio of 3:2:1 c Accounts Payable A/c Dr       254,000 To Cash A/c       254,000 Being Cash paid for the accounts payable d Kendra Capital A/c Dr 46900 Cogley Capital A/c Dr 152550 Mei Capital A/c Dr 124150 To Cash A/c       323,600 Being Balance Cash paid to the Partners by adjusting the Capital Accounts Amount $ 3:02:01 Kendra Cogley Mei Capital        76,600       172,350       134,050        29,700        19,800          9,900 Capital        46,900       152,550       124,150 46900 152550 124150 Cash Statement Opening 100000 Sale of Invetory       477,600 Amount Paid for Payable     (254,000) Balance 323600 III If Invetory is Sold for the $353400/- Amount $ S.No Transaction Debit   Credit a Cash A/c Dr       353,400 Realisation A/c Dr       183,600 To Inventory A/c       537,000 Being Sale of Invetory for Loss of $59400 b Kendra Capital A/c        91,800 Cogley Capital A/c        61,200 Mei Capital A/c        30,600 To Realisation A/c Dr       183,600 Being Distrivution of Loss to the Partners in the ratio of 3:2:1 c Accounts Payable A/c Dr       254,000 To Cash A/c       254,000 Being Cash paid for the accounts payable d Cogley Capital A/c Dr       111,150 Mei Capital A/c Dr       103,450 To Cash A/c       199,400 To Kendra Capital A/c        15,200 Being Cash paid to the Cogley and Mei along with Cash contrbuted by Kendra for deficit in his Capital Amount $ 3:02:01 Kendra Cogley Mei Capital        76,600       172,350       134,050 91800 61200 30600 Capital       (15,200)       111,150       103,450 Cash Statement Opening 100000 Sale of Invetory       353,400 Amount Paid for Payable     (254,000) Balance 199400 IV If Invetory is Sold for the $279600/- Amount $ S.No Transaction Debit   Credit a Cash A/c Dr       279,600 Realisation A/c Dr       357,400 To Inventory A/c       637,000 Being Sale of Invetory for Loss of $59400 b Kendra Capital A/c       178,700 Cogley Capital A/c       119,133 Mei Capital A/c        59,567 To Realisation A/c Dr       357,400 Being Distrivution of Loss to the Partners in the ratio of 3:2:1 c Accounts Payable A/c Dr       254,000 To Cash A/c       254,000 Being Cash paid for the accounts payable d Cogley Capital A/c Dr        53,217 Mei Capital A/c Dr        74,483 To Cash A/c        25,600 To Kendra Capital A/c       102,100 Being Cash paid to the Cogley and Mei along with Cash contrbuted by Kendra for deficit in his Capital Note In problem , it is given that no other assets are available , hence Cash Balance consisdered as zero and for balancing balnce sheet the invetory value increaed by $100000 Amount $ 3:02:01 Kendra Cogley Mei Capital        76,600       172,350       134,050 178700 119133 59567 Capital     (102,100)        53,217        74,483 Cash Statement Opening 0 Sale of Invetory       279,600 Amount Paid for Payable     (254,000) Balance 25600