Kendra, Cogley, and Mei share income and loss in a 3:2:1 ratio (in ratio form: Kendra, 3/6; Cogley, 2/6; and Mei, 1/6). The partners have decided to liquidate their partnership. On the day of liquidation, their balance sheet appears as follows.
Balance Sheet
Assets Liabilities
Cash $ 180,800 Accounts payable $ 245,500
Inventory 537,200 Equity
Kendra, Capital 93,000
Cogley, Capital 212,500
Mei, Capital 167,000
Total assets $ 718,000 Total liabilities and equity $ 718,000
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. Enter losses and partner deficits, if any, as negative amounts.)
1. Inventory is sold for $600,000.
2. Inventory is sold for $500,000.
3. Inventory is sold for $320,000 and partners with deficits pay their deficits in cash.
4. Inventory is sold for $250,000 and partners with deficits do not pay their deficits.
