The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its business property. A balance sheet drawn up at this time shows the following account balances: Cash - $66,000 Noncash - $231,000
The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its business property. A balance sheet drawn up at this time shows the following account balances:
Cash - $66,000
Noncash - $231,000
Liabilities - $46,000
Frick, capital (60%) - $135,000
Wilson, capital (20%) - $37,000
Clarke, capital (20%) - $79,000
The following transactions occured in liquidating its business:
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Distributed safe payments of cash immediately to the partners. Liquidation expenses of $10,000 are estimated as a basis for this computation.
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Sold noncash assets with a book value of $98,000 for $66,000.
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Paid all liabilities.
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Distributed safe payments of cash again.
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Sold remaining noncash assets for $53,000.
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Paid actual liquidation expenses of $8,000 only.
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Distributedremainingcashtothepartnersandclosedthefinancialrecordsofthebusinesspermanently.
Produce a final statement of liquidation for this partnership using the predistribution plan to determine payments of cash to partners.
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