90.2K

Verified Solution

Link Copied!

9 PART A (30 points) 10 Wind & Rambler agree to form a partnership on January 1, 2020 Wiad has operated a business as a sole proprietorship for a number of years and will contribute the set of his business to the partnership The 11 appraised value of the netes in Winds business are given below 12 5 13 Cash 25,000 14 Receivables 100,000 15 Inventory 215.000 180,000 16 Property, plant &quipment, et 19 Accounts payable (120,000) 18 Accrued liabilities (55,000) 19 Mortgage payable (30.000) 20 Net Assets $ 315.000 21 22 Rambler has significant experience in marketing and will 23 contribute cash in the amount of $ 340,000 24 25 Wind & Rambler agree to begin operations with equal capital balances. The partnership agreement also indicates 26 that the bonus method will be used to account for any changes in partner ownership 27 The Articles of Partnership (the partnership agreement provide that income and losses are to be allocated in the 2 following manner 29 30 Wind is to receive a salary of $ 75,000 31 * Rambler is to receive a salary of $ 65,000 Interest is calculated on the beginning capital balances at a 32 rate of 89 33 The remaining gain or low is to be allocated to Wind & 34 Rumble in the ratio of 32 35 36 37 Each partner is provided a monthly drawer $ 1,500 38 19 Income for 2020 amounted to 5 250,000 40 20% $ 50,000 41 On January 2, 2021, Donner joined the partnership by paying a total of 5350,000 to Wind & Rambler directly. For this payment. Denne 42 received a partnership interest of 43 44 The partnership agreement was revised to allow Donner 45 - salary of 46 Wind & Rambler's lares remain unchanged 47 Interest is allowed on all partner's beginning capital balances 48 at the rate previously stated 49 The remaining gain or loss is to be split to Wind. Rambler 30 Done in the ratio of 51 52 Each partner is provided a monthly draw of sa 54 Income for 2021 amounted to 55 1:25 $ 1.800 225,000 On January 1, 2022, Wind decided to retire and cold sparen interest directly to Marbelle Rambler and Dooner agreed to the sale and mission of Machete pa The partecip greement was changed to reflect Macbelle taking the place of Wind. All layers and profit allocations previously provided to Wind 56 now goes to Macbelle Macbelle is also allowed my drew Windsor draw 57 SB Income for 2022 meta 5 275.000 Sheet1 + in 33 * The remaining gain or loss is to be allocated to Wind & 3:2 34 Rambler in the ratio of 35 36 37 Each partner is provided a monthly draw of 1,500 38 S 39 Income for 2020 amounted to 250,000 40 41 On January 2, 2021, Donner joined the partnership by paying a total of $350,000 to Wind & Rambler directly. For this payment, Donner 20% 42 received a partnership interest of 43 44 The partnership agreement was revised to allow Donner 45 a salary of 50,000 46 Wind's & Rambler's salaries remain unchanged 47 Interest is allowed on all partner's beginning capital balances 48 at the rate previously stated 49 The remaining gain or loss is to be split to Wind, Rambler & 50 Donner in the ratio of: 3:2:5 51 52 Each partner is provided a monthly draw of $ 1.800 53 54 Income for 2021 amounted to s 225,000 55 On January 1, 2022, Wind decided to retire and sold his partnership interest directly to Macbelle. Rambler and Donner agreed to the sale and admission of Macbelle into the partnership. The partnership agreement was changed to reflect Macbelle taking the place of Wind. All salary, interest and profit allocations previously provided to Wind 56 now goes to Macbelle. Maebelle is also allowed a monthly draw equal to Wind's prior draw. 57 58 Income for 2022 amounted to $ 275,000 59 60 Required: 61 1 For each of the years 2020-2022, prepare a 62 Statement of Partnership Capital 63 Schedule of Income Allocation 64 55 66 PART B (20 points) 67 Ten years later, the partners Rambler, Donner and Macbelle agree to liquidate the partnership. Their partnership 68. capital and profit/loss percentages at that time are shown below: 69 Rambler $ 850,000 70 Donner 71 450.000 Macbelle 900,000 72 73 Liquidation expenses are expected be 23,000 74 75 Required: Prepare a Pre-Distribution Plan to be used during the liquidation process. 76 77 b U XWNS 9 PART A (30 points) 10 Wind & Rambler agree to form a partnership on January 1, 2020 Wiad has operated a business as a sole proprietorship for a number of years and will contribute the set of his business to the partnership The 11 appraised value of the netes in Winds business are given below 12 5 13 Cash 25,000 14 Receivables 100,000 15 Inventory 215.000 180,000 16 Property, plant &quipment, et 19 Accounts payable (120,000) 18 Accrued liabilities (55,000) 19 Mortgage payable (30.000) 20 Net Assets $ 315.000 21 22 Rambler has significant experience in marketing and will 23 contribute cash in the amount of $ 340,000 24 25 Wind & Rambler agree to begin operations with equal capital balances. The partnership agreement also indicates 26 that the bonus method will be used to account for any changes in partner ownership 27 The Articles of Partnership (the partnership agreement provide that income and losses are to be allocated in the 2 following manner 29 30 Wind is to receive a salary of $ 75,000 31 * Rambler is to receive a salary of $ 65,000 Interest is calculated on the beginning capital balances at a 32 rate of 89 33 The remaining gain or low is to be allocated to Wind & 34 Rumble in the ratio of 32 35 36 37 Each partner is provided a monthly drawer $ 1,500 38 19 Income for 2020 amounted to 5 250,000 40 20% $ 50,000 41 On January 2, 2021, Donner joined the partnership by paying a total of 5350,000 to Wind & Rambler directly. For this payment. Denne 42 received a partnership interest of 43 44 The partnership agreement was revised to allow Donner 45 - salary of 46 Wind & Rambler's lares remain unchanged 47 Interest is allowed on all partner's beginning capital balances 48 at the rate previously stated 49 The remaining gain or loss is to be split to Wind. Rambler 30 Done in the ratio of 51 52 Each partner is provided a monthly draw of sa 54 Income for 2021 amounted to 55 1:25 $ 1.800 225,000 On January 1, 2022, Wind decided to retire and cold sparen interest directly to Marbelle Rambler and Dooner agreed to the sale and mission of Machete pa The partecip greement was changed to reflect Macbelle taking the place of Wind. All layers and profit allocations previously provided to Wind 56 now goes to Macbelle Macbelle is also allowed my drew Windsor draw 57 SB Income for 2022 meta 5 275.000 Sheet1 + in 33 * The remaining gain or loss is to be allocated to Wind & 3:2 34 Rambler in the ratio of 35 36 37 Each partner is provided a monthly draw of 1,500 38 S 39 Income for 2020 amounted to 250,000 40 41 On January 2, 2021, Donner joined the partnership by paying a total of $350,000 to Wind & Rambler directly. For this payment, Donner 20% 42 received a partnership interest of 43 44 The partnership agreement was revised to allow Donner 45 a salary of 50,000 46 Wind's & Rambler's salaries remain unchanged 47 Interest is allowed on all partner's beginning capital balances 48 at the rate previously stated 49 The remaining gain or loss is to be split to Wind, Rambler & 50 Donner in the ratio of: 3:2:5 51 52 Each partner is provided a monthly draw of $ 1.800 53 54 Income for 2021 amounted to s 225,000 55 On January 1, 2022, Wind decided to retire and sold his partnership interest directly to Macbelle. Rambler and Donner agreed to the sale and admission of Macbelle into the partnership. The partnership agreement was changed to reflect Macbelle taking the place of Wind. All salary, interest and profit allocations previously provided to Wind 56 now goes to Macbelle. Maebelle is also allowed a monthly draw equal to Wind's prior draw. 57 58 Income for 2022 amounted to $ 275,000 59 60 Required: 61 1 For each of the years 2020-2022, prepare a 62 Statement of Partnership Capital 63 Schedule of Income Allocation 64 55 66 PART B (20 points) 67 Ten years later, the partners Rambler, Donner and Macbelle agree to liquidate the partnership. Their partnership 68. capital and profit/loss percentages at that time are shown below: 69 Rambler $ 850,000 70 Donner 71 450.000 Macbelle 900,000 72 73 Liquidation expenses are expected be 23,000 74 75 Required: Prepare a Pre-Distribution Plan to be used during the liquidation process. 76 77 b U XWNS

Answer & Explanation Solved by verified expert

See Answer