REFERENCE: Ref.15_02 On January 1,2009,the Partners of Won,Cadel,and Dax (Who Shared Profits

question 68

Essay

REFERENCE: Ref.15_02
On January 1,2009,the partners of Won,Cadel,and Dax (who shared profits and losses in the ratio of 5:3:2,respectively)decided to liquidate their partnership.The trial balance at this date was as follows:
The partners planned a program of piecemeal conversion of the business assets to minimize liquidation losses.All available cash,less an amount retained to provide for future expenses,was to be distributed to the partners at the end of each month.A summary of liquidation transactions follows:

-Prepare a schedule to calculate the safe installment payments to be made to the partners at the end of March.

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Definitions:

GAAP

Generally Accepted Accounting Principles, a collection of commonly-followed accounting rules and standards for financial reporting.

CVP Analysis

A management accounting method used to analyze the impact of varying levels of costs and volume on operating profit.

Fixed Cost

Expenses that do not change with the volume of production or sales, such as rent, salaries, and insurance premiums.

Activity Level

The activity level is a measure of volume of work or operations, which could influence costs and operational efficiency within a business.