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{"ops":[{"insert":"\n\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0UNITY UNIVERSITY\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0DEPARTMENT OF ACCOUNTING &FINANCE\n\u00a0\u00a0\u00a0GROUP\u00a0ASSIGNMENT ONE ON ADVANCED FINANCIAL ACCOUNTING II\n1.\tAssume that Grace Partnership was owned and operated by partners A and B for the last ten years. The partners decided to liquidate the partnership and the liquidation process took between June 1 and October 15, 2020. The balance sheet of the partnership immediately prior to liquidation is shown below:\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0A&B Partnership\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Balance Sheet\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0May 1,2020\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Assets\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Liabilities & Partners\u2019 Capital\nCash\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.Br\u00a025,000\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Liabilities\u2026\u2026\u2026\u2026Br. 35000\nAccount receivables\u00a0\u00a0\u00a0\u00a0\u00a0\t20,000\t\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0A, capital\u2026\u2026\u2026\u2026... 110,000\n\u00a0\u00a0\u00a0Inventories\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.55,000\t\tB, Capital\u2026\u2026\u2026\u2026.\t130,000\n\u00a0\u00a0\u00a0Fixed Asset\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026..175,000\t\t\t\t______\t\nTotal\u2026\u2026\u2026\u2026\u2026\u2026\u2026\t275,000\tTotal\u2026\u2026\u2026\u2026.\t275,000\n\nThe following assumptions are made that the liquidation of A& B partnership proceeds in an orderly fashion from June 1,2020 through October 15,2020.\n\n-June1,2020;\u00a0The inventory is sold at auction for Br 45,000.A and B allocate all profits and\u00a0\n\u00a0\u00a0losses using 3:2 ratios, respectively\n- July 15,2020: From the total Account receivable Br 15,000 is collected with the remainder\u00a0\u00a0\n\u00a0being written off as bad debts.\n- August 20,2020 : The fixed asset are sold for a total of Br 200,000.\n-August 25,2020:All partnership liabilities are paid\n-September 10,2020 A total of Br 8000 liquidation expenses is paid to cover costs such as accounting and legal fees, commissions incurred in disposing of partnership property.\n-October 15,2020: All remaining cash is distributed to the owners based on their final capital account balances.\n\nRequired (7 points)\na.\tPrepare the Statement of Partnership Liquidation\u00a0\nb.\tPrepare the necessary entry to record the transactions arising in the liquidation process\u00a0\n2.\tTo illustrate, assume that the partners of XYZ Partnership who share net income or loss in a 4:3:2 ratios decide to liquidate the partnership and distribute cash in installments. The balance sheet just prior to liquidation on July 5, 2020 is as follows:\n\nXYZ Partnership\nBalance Sheet\nJuly 5, 1999\n\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Assets\t\t\t\t\tLiabilities & Partners\u2019 Capital\nCash\t\t\t\u00a0\u00a0\u00a0\u00a010,000\t\t Liabilities\t\t\u00a0\u00a0\u00a0\u00a0\u00a0\u00a065,000\nOther Assets\t\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0190,000\t\t X, Capital\t\t\u00a0\u00a0\u00a0\u00a0\u00a0\u00a030,000\n\t\t\t\t\t\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Y, Capital\t\u00a0\u00a050,000\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\t\t\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Z, Capital\t\t\u00a0\u00a0\u00a0\u00a0\u00a0\u00a055,000\nTotal\t\t\t\u00a0\u00a0\u00a0\u00a0200,000\t\tTotal\t\t\t\u00a0\u00a0\u00a0\u00a0\u00a0200,000\t\n\n\u00a0\u00a0Assume that non-cash assets were realized as follows\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0XY&Z LLP\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Realization of Other Assets\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0July 6 to September 30, 1999\nDate \t\t\tBook Value\tProceed\t\tLoss\nJuly 31\t\t\u00a0\u00a0\u00a0\u00a0\u00a0\u00a060,000\t\t\u00a048,000\t\t12,000\nAugust 31\t\t70,000\t\t\u00a030,000\t\t40,000\nSeptember         30\t\u00a0\u00a0\u00a0\u00a0\u00a0\u00a060,000\t\t\u00a032,000\t\t28,000\nTotal \t\t\t  190,000\t\u00a0110,000\t\t80,000\n\n\nInstructions: Based on the above data prepare statement of partnership liquidation using installment liquidation method.\u00a0\n3.\tScenarios of Deficit Capital Balance\n\n\tCash\tX Capital (4)\tY Capital (2)\tZ Capital(4)\nCapital Balance\t65,000\t45,000\t35,000\t(15,000)\n\nUsing the above data present the necessary journal entries based on the following assumptions.\nAssumption 1.The deficit capital is entirely collected from partner with deficit capital\n\uf0d8\tPresent entries to record collection of cash and distribution of cash to partners with positive capital\nAssumption 2.The deficit capital is considered to be loss to the remaining partners(un able to pay all deficit balances and the remaining partners willing to absorb the deficit balance)\n\uf0d8\tPresent entries to record\u00a0\ni.\tDistribution of loss (deficit)\nii.\t distribution of remaining cash balance to partners with positive capital\nAssumption3.The deficit capital is partially paid by partner with deficit partner for Br 10,000 and the remainder deficit capital balance will bear by partner with positive balance.\n\uf0d8\t Present entries to record\u00a0\ni.\tCollection of cash partial payment by partners with deficit balance\nii.\tDistribution of loss (deficit)\niii.\t distribution of remaining cash balance to partners with positive capital\n\n\n"}]}

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