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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Liquidating partnerships

Prior to liquidating their partnership, Joyce and Xi had capital accounts of $50,000 and $105,000, respectively. Prior to liquidation, the partnership had no cash assets other than what was realized from the sale of assets. These partnership assets were sold for $190,000. The partnership had $10,000 of liabilities. Joyce and Xi share income and losses equally. Determine the amount received by Joyce as a linai distribution from liquidation of the partnership.

To determine

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.

To determine:  The amount received by J as final distribution from liquidation of partnership.

Explanation

The amount received by J as final distribution from liquidation of partnership is as follows:

J's equity prior to liquidation……… $50,000
Realization of asset sales……………… $190,000
Book value of assets (liabilities + owner's equity)
($50,000 + �...

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