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 $ 103,900 Accounts payable $ 258,000
Inventory 537,600 Kendra, Capital 76,700
Cogley, Capital 172,575
Mei, Capital 134,225
Total assets $641,500 Total liabilities and equity $641,500
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 $608,400.
(2) Inventory is sold for $469,200.
(3) Inventory is sold for $358,800 and any partners with capital deficits pay in the amount of their deficits.
(4) Inventory is sold for $298,800 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:
Inventory
Complete the schedule allocating the gain or loss on the sale of inventory is $608,400.
1. Record the sale of inventory.
2. Allocate the gain(loss) on the sale of inventory to the partners.
3. Record the payment of the liabilities.
4. Record the disbursement of the remaining cash to the partners.

Answer

1)a

Dr Cash608,400

Cr Inventory 537,600

Cr Gain on Sale of Inventory 70,800

b.

Dr Gain on Sale of Inventory70,800

Cr Kendra' Capital 35,400

Cr Cogley's Capital 23,600

Cr Mei' Capital 11,800

c.

Dr Accounts Payable258,000

Cr Cash 258,000

d.

Dr Kendra' Capital112,100

Dr Cogley's Capital196,175

Dr Mei, Capital 146,025

Cr Cash 454,300

2a.

Dr Cash469,200

Dr Loss on Sale of Inventory68,400

Cr Inventory 537,600

b.

Dr Kendra' Capital34,200

Dr Cogley's Capital22,800

Dr Mei' Capital11,400

Cr Loss on sale of Inventory 68,400

c.

Dr Accounts Payable258,000

Cr Cash 258,000

d.

Dr Kendra' Capital42,500

Dr Cogley's Capital149,775

Dr Mei' Capital122,825

Cr Cash 315,100

3a.

Dr Cash358,800

Dr Loss on Sale of Inventory178,800

Cr Inventory 537,600

b.

Dr Kendra' Capital89,400

Dr Cogley's Capital59,600

Dr Mei' Capital29,800

Cr Loss on sale of Inventory 178,800

c.

Dr Cash12,700

Cr Kendra' Capital 12,700

d.

Dr Accounts Payable258,000

Cr Cash 258,000

e.

Dr Cogley's Capital17,100

Dr Mei' Capital104,425

Cr Cash 121,525

4a.

Dr Cash298,800

Dr Loss on Sale of Inventory238,800

Cr Inventory 537,600

b.

Dr Kendra' Capital119,400

Dr Cogley's Capital79,600

Dr Mei' Capital39,800

Cr Loss on sale of Inventory 238,800

c.

Dr Cogley's Capital28,466

Dr Mei' Capital14,234

Cr Kendra' Capital 42,700

d.

Dr Accounts Payable 258,000

Cr Cash 258,000

e.

Dr Cogley's Capital 64,509

Dr Mei' Capital 80,191

Cr Cash 144,700

Explanation:

Preparation of the Prepare journal entries to record the sales of inventory

1)a

Dr Cash608,400

Cr Inventory 537,600

Cr Gain on Sale of Inventory 70,800

(608,000-536,600)

b

Dr Gain on Sale of Inventory70,800

(608,000-536,600)

Cr Kendra' Capital 35,400

(3/6×70,800)

Cr Cogley's Capital 23,600

(2/6×70,800)

Cr Mei' Capital 11,800

(1/6×70,800)

c.

Dr Accounts Payable258,000

Cr Cash 258,000

d.

Dr Kendra' Capital112,100

(76,700+35,400)

Dr Cogley's Capital196,175

(172,575+23,600)

Dr Mei, Capital 146,025

(134,225+11,800)

Cr Cash 454,300

(112,100+196,175+146,025)

2)Preparation of the Journal entries to Allocate the gain(loss) on the sale of inventory to the partners.

a.

Dr Cash469,200

Dr Loss on Sale of Inventory68,400

(469,200-537,600)

Cr Inventory 537,600

b.

Dr Kendra' Capital34,200

(3/6×68,400)

Dr Cogley's Capital22,800

(2/6×68,400)

Dr Mei' Capital11,400

(1/6×68,400)

Cr Loss on sale of Inventory 68,400

c.

Dr Accounts Payable258,000

Cr Cash 258,000

d.

Dr Kendra' Capital42,500

(76,700-34,200)

Dr Cogley's Capital149,775

(172,575-22,800)

Dr Mei' Capital122,825

(134,225-11,400)

Cr Cash 315100

(42,400+149,775+122,825)

3)Preparation of the Journal entries to Record the payment of the liabilities

a.

Dr Cash358,800

Dr Loss on Sale of Inventory178,800

(358,800-537,500)

Cr Inventory 537,600

b.

Dr Kendra' Capital89,400

(3/6×178,800)

Dr Cogley's Capital59,600

(2/6×178,800)

Dr Mei' Capital29,800

(1/6×178,800)

Cr Loss on sale of Inventory 178,800

(89,400+59,600+29,800)

c.

Dr Cash12,700

Cr Kendra' Capital 12,700

(76,700 - 89,400)

d.

Dr Accounts Payable258,000

Cr Cash 258,000

e.

Dr Cogley's Capital17,100

(76,700-59,600)

Dr Mei' Capital104,425

(134,225-29,800)

Cr Cash 121,525

(17,100+104,425)

4) Preparation of the Journal entries to Record the disbursement of the remaining cash to the partners

a.

Dr Cash298,800

Dr Loss on Sale of Inventory238,800

(298,800-537,600)

Cr Inventory 537,600

b.

Dr Kendra' Capital119,400

(3/6×238,800)

Dr Cogley's Capital79,600

(2/6×238,800)

Dr Mei' Capital39,800

(1/6×238,800)

Cr Loss on sale of Inventory 238,800

(119,400+79,600+39,800)

c.

Dr Cogley's Capital28,466

(2/3×42,700)

Dr Mei' Capital14,234

(1/3×42,700)

Cr Kendra' Capital 42,700

(76,700 - 119,400)

d.

Dr Accounts Payable 258,000

Cr Cash 258,000

e.

Dr Cogley's Capital 64,509

(172,575 - 79,600 - 28,466)

Dr Mei' Capital 80,191

(134,225 - 39,800 - 14,234)

Cr Cash 144,700

(80,191+64,509)

answer: nobody

explanation:

one of the appeals of a sole proprietorship is that business expenses are kept separate from your personal income tax return