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MARMARA UNIVERSITYINSTITUTE OF SOCIAL SCIENCESADVANCED ACCOUNTINGFINAL EXAM1.The NOP Partnership is being liquidated. A balance sheet prepared prior to liquidation is presentedbelow:Cash$ 85,000Liabilities$ 55,000Other Assets95,000Pratt, Loan20,000Nye, Capital60,000Ott, Capital20,000Pratt, Capital25,000Total Assets$180,000Total Equities$180,000Nye, Ott, and Pratt share profits and losses in a 40:40:20 ratio. All partners are personally insolvent.Required:A. Prepare the journal entries necessary to record the distribution of the available cash.B. Prepare the journal entries necessary to record the completion of the liquidation process,assuming the other assets are sold for $30,000.2.On November 1, 2003, Dexter Company sold inventory to a company in England. The sale was for300,000 British pounds and payment will be received on February 1, 2004. On November 1, Dexterentered into a forward contract to sell 300,000 British pounds on February 1 at the forward rate of$1.55. Spot rates for the British pound are as follows:November 1$1.51December 311.57February 11.52Dexter has a December 31 fiscal year-end.Required:Compute each of the following:1. The dollars to be received on February 1, 2004, from selling the 300,000 pounds to the exchangedealer.2. The dollars that would have been received from the account receivable if Dexter had not hedgedthe sale contract with the forward contract.3. The discount or premium on the forward contract.4. The transaction gain or loss on the exposed asset related to the sale in 2003 and 2004.5. The transaction gain or loss on the forward contract in 2003 and 2004.6. The amount of the discount or premium on the forward contract amortized in 2003 and 2004.
3.Pattern Company purchased 100% of Stock Company on January 2, 2004, for $450,000. At the time,Stock's capital stock was $300,000, and its retained earnings was $150,000. At the time, Pattern andStock had no intercompany transactions. Any excess of cost over book value is attributable to land.A. Prepare the journal entry to record Pattern's investment in Stock.B. Prepare the entry to eliminate Pattern's investment in Stock.C. Complete the workpaper below.Pattern Company and Subsidiary Company StockWorkpaperJanuary 2, 2004PatternCompanyStockCompanyEliminationsCons.Bal. SheetDebitCreditAssetsCash$ 200,000$ 50,000Accts receivable75,00025,000Inventory80,00050,000Investment in S450,000Plant & equip. (net)500,000350,000Land100,00050,000Total Assets$1,450,000$525,000Liabilities &EquityAccounts payable$ 150,000$ 75,000Capital stock1,000,000300,000Retained earnings255,000150,000Total Liab. &Eq.$1,450,000$525,000D. Assume that Pattern paid $360,000 for an 80% interest in Stock Company. Any differencebetween cost and book value is attributed to goodwill. Prepare the entry to eliminate P's investmentin S