After closing the accounts on July 1, prior to liquidating the partnership, the capital account balances of Gold, Porter, and Sims are $55,000, $45,000, and $20,000, respectively. Cash, noncash assets, and liabilities total $56,000, $96,000, and $32,000, respectively. Between July 1 and July 29, the noncash assets are sold for $90,000, the liabilities are paid, and the remaining cash is distributed to the partners. The partners share net income and loss in the ratio of 3:2:1. Prepare a statement of partnership liquidation for the period July 1–29.

Question
Asked Dec 19, 2019
44 views

After closing the accounts on July 1, prior to liquidating the partnership, the capital account balances of Gold, Porter, and Sims are $55,000, $45,000, and $20,000, respectively. Cash, noncash assets, and liabilities total $56,000, $96,000, and $32,000, respectively. Between July 1 and July 29, the noncash assets are sold for $90,000, the liabilities are paid, and the remaining cash is distributed to the partners. The partners share net income and loss in the ratio of 3:2:1. Prepare a statement of partnership liquidation for the period July 1–29.

check_circle

Expert Answer

Step 1

Partnership 

It is that form of organization which is owned and managed by two or more persons who invest and share the profits and losses according to a pre-determined ratio. 

Liquidating Partnership 

The winding up of process of partnership is called liquidation of partnership. At the time of liquidation of partnership realization of account is prepared.

Step 2

Prepare the statement of partnership liquidation...

help_outline

Image Transcriptionclose

G, P and S Statement of Partnership Liquidation For the Period Ending July 1–29 Non Cash Capital G (14) | P (1/4) | S (214) S32,000 S55,000 S45,000| S20,000 -$3,000 -$2,000 -S1,000 $32,000 S52,000| S43,000 | S19,000 Liabilities Cash + Assets = Balances before realization (A) $56,000 $96,000 $90,000 -S96,000 Sale of assets and division of loss (W.N-1) (B) Balances after realization (A) - (B) Payment of liabilities (C) Balances after payment of liabilities (A)-(B)-( C) $114,000 |Cash distributed to partners Final balances $146,000 -$32,000 SO -S32,000 SO $52,000 S43,000 | S19,000 -$52,000 -S43,000| -S19,000 SO SO -$114,000 SO SO SO SO SO

fullscreen

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in

Business

Accounting

Other

Related Accounting Q&A

Find answers to questions asked by student like you
Show more Q&A
add
question_answer

Q: Urban Window Company had gross wages of $320,000 during the week ended July 15. The amount of wages ...

A: a) 

question_answer

Q: How can a company with multiple products compute its breakeven point?

A: Break-even is a point of sales where revenue generated is equal to the total costs. Break-even point...

question_answer

Q: How is the Income Summary account used? Is it a temporary or permanent account?

A: Income summary is an account which is prepared for closing accounts. It is prepared at the end of ye...

question_answer

Q: The following transactions and adjusting entries were completed by Robinson Furniture Co. during a t...

A: The following journal entries for year 1 has been prepared and recorded in accounts.

question_answer

Q: How is knowing the degree of operating leverage helpful to managers?

A: Degree of Operating Leverage:  Degree of operating leverage is an efficiency ratio which evaluates t...

question_answer

Q: Accounting for a main product and a byproduct (Cheatham and green, adapted)Crispy,Inc., is a produce...

A: Production Method: Production method is a method of accounting for byproducts. As per production met...

question_answer

Q: Quantas Industries sold $325,000 of consumer electronics during July under a nine-month warranty. Th...

A: a. Prepare the journal entry to record the estimated warranty expense on July 31 for July sales.

question_answer

Q: The following table shows the sales and average book value of fixed assets for three dif- ferent com...

A: a.Calcualte fixed asset turnover ratios: 

question_answer

Q: On-Time Delivery Company acquired an adjacent lot to construct a new warehouse, paying $90,000 and g...

A: Click to see the answer