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The following balance sheet was prepared for Haye & Lee LLP immediately prior to liquidation: (Problem 3.7) CHECK FIGURES Apr. 15, debit Lee,...

The following balance sheet was prepared for Haye & Lee LLP immediately prior to
liquidation:
(Problem 3.7)
CHECK FIGURES
Apr. 15, debit Lee,
capital, $2,900.
HAYE & LEE LLP
Balance Sheet (unaudited)
March 31, 2005
Assets Liabilities and Partners’ Capital
Cash $10,000 Liabilities $27,000
Investments in marketable Haye, capital 72,000
equity securities (available Lee, capital 31,000
for sale) 44,000
Accumulated other
Other assets 100,000 comprehensive income 24,000
Total $154,000 Total $154,000
Haye and Lee shared operating income or losses in a 2 : 1 ratio and gains and losses on invest-
ments in a 3 : 1 ratio. The transactions and events to complete the liquidation were as follows:
2005
Apr. 1 Haye withdrew the marketable equity securities at the agreed current fair value
of$44,000.
3 Other assets and the trade name, Haley’s, were sold to Wong Products for
$200,000 face amount of 12% bonds with a current fair value of $180,000. The
gain on this transaction was an investment gain. The bonds were classified as
available for sale.
Lar22559_ch03_075_120.qxd 10/2/04 2:01 PM Page 117
EQA 118 Part One Accounting for Partnerships and Branches
Apr. 7 Wong Products 12% bonds with a face amount of $40,000 were sold for
$35,600 cash. The loss on this transaction was an investment loss.
8 Liabilities were paid.
10 Haye withdrew $100,000 face amount and Lee withdrew $60,000 face amount
of Wong Products 12% bonds at carrying amounts.
15 Available cash was paid to Haye and to Lee.
Instructions
Prepare journal entries for Haye & Lee LLP to record the foregoing transactions and
events. Disregard interest on the bonds of Wong Products.
(Larsen. Custom book for Ashford: Modern Advanced Accounting. McGraw-Hill Primis Custom Publishing, 38503. 136 - 137).
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