Liquidation of partnership : Winding-up and liquidation of the partnership begin after its dissolution. The winding-up process includes the transactions necessary to liquidate the partnership, such as collection of receivables disposal of noncash assets, payment of partnership’s obligations and distribution of any remaining net balance to the partners, in cash according to their capital interests. If partnership agreement does not have any provisions on liquidation or any liquidation ratio or profits or loss ratio for distribution of remaining balance it is distributed using normal profit and loss ratio during partnership’s operation. the if some of the partners can terminate the partnership when the partnership becomes unlawful because of change in law, and partnership engagement is no longer lawful.

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Chapter 16, Problem 16.8Q

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Liquidation of partnership: Winding-up and liquidation of the partnership begin after its dissolution. The winding-up process includes the transactions necessary to liquidate the partnership, such as collection of receivables disposal of noncash assets, payment of partnership’s obligations and distribution of any remaining net balance to the partners, in cash according to their capital interests. If partnership agreement does not have any provisions on liquidation or any liquidation ratio or profits or loss ratio for distribution of remaining balance it is distributed using normal profit and loss ratio during partnership’s operation.

the if some of the partners can terminate the partnership when the partnership becomes unlawful because of change in law, and partnership engagement is no longer lawful.

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Which of the following transactions or events does not affect the total assets of a partnership? A. A partnership is dissolved and its assets and liabilities are revalued to fair value. B. An old partner retires and his capital balance is settled by the partnership at a lower amount. C. An incoming partner purchases interest from an existing partner. D. A new partner is admitted in a partnership when he invested noncash asset to the partnership.

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