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muffinman
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| Posted: 16 Sep 2010 at 01:11 | IP Logged
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The Becker F2 lecture covering the withdrawal and liquidation of partnerships was a bit...lacking... lecture added no value to the weaksauce text for this subsection and the answer explanations are even worse.
I still have no idea how they arrived at Answer "b" for the following question:
The explanation... WTF?
Any guidance would be much appreciated. Thanks in advance
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jmanwani
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| Posted: 16 Sep 2010 at 01:56 | IP Logged
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Becker solution is exactly right.. i did the problem within a minute got the solution.,.
step 1.. make the schedule as shown in the problem..
step 2 - sell the assets off for 500000 .. that is at a loss of 125000 .. original value as per books is 625000
step 3.. distribute the loss 60:40 .. 75000 loss to alpha and 50000 to beda..
at this stage the capital of alpha is 273000(348-75) and beda is 182000 and cash balance is 45000+500000 = 545000
step 4.. pay of ap worth 120000 and reduce cash by 120000
now the cash balance is 425000 .. (545000-120000)
step 5.. loan is in the current assets of balance sheet which means PARTNER TOOK THE LOAN so its receivable for p'ship and beda has to payback... it would have been taken off from cash if it was an advance BY the partner and not advance TO the partner .. TO means asset and BY means liability.
step 6.. rule is to offset the loan against partner capital balance and this case.. u will square off 30000 from bedas cap which is .. 182000 - 30000 and his capital becomes = 152000
step 7 .. what was the cash balance in step 4 ..
it was 425000.. and what are balances for partners cap balance.. u can see beda has 152000 and alpha has 273000.. and my friend becker is correct :)))
all the best !!
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Jay!
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muffinman
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| Posted: 16 Sep 2010 at 02:03 | IP Logged
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Thanks jman, I have no doubt that Becker's answer was correct, just that the way they laid out the table and the way they wrote / lectured this particular section was craptastic.
Your explanation was 1000000x better, thanks again.
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jmanwani
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| Posted: 16 Sep 2010 at 02:05 | IP Logged
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lol.. no problem my friend.. all the best and good luck :)
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Jay!
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Interpol CPA
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| Posted: 16 Sep 2010 at 04:54 | IP Logged
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Ive found the Becker MCQ explanations to be a bit sparse in FAR
compared to the other sections. Odd...
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Passed all on 1st try, Becker only
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Topic: Becker F2 Sucks- Partner Liquidation
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