PRINTE R VERSION BACK Exercise 12-9 irm is liquidated, and S113,000 in cash is r

Question

PRINTE R VERSION BACK Exercise 12-9 irm is liquidated, and S113,000 in cash is received for the noncash assets. Floyd and Dewi tin on e rati s are 70% and 30% respectively, Seda ak Co liquidate the partnership y now do et Prepare the entries to record: (Credit account titles are automatically indented when amount is entered Do not indent anually) (a) The sale of noncash assets (b) The allecation of the gain or loss on realization to the partners (c) Payment of creditors (d) Distribution of cash to the pactners

Explanation / Answer

(a) Sale of Non cash assets Account Debit Credit Cash $113,000 Non cash assets $107,000 Gain on sale $6,000 (113000-107000) (b) Allocation toPartners Account Debit Credit Gain onSale $6,000 Capital-Floyd $4,200 (0.7*6000) Capital-DeWitt $1,800 (0.3*6000) .(c) Payment to creditors Account Debit Credit Liabilities $53,600 Cash $53,600 (d) Distributionof cash to partners Information onCapital Balances are required Totalcapital $        74,200 (20800+107000-53600) Assuming Capitalin Ratio of 70:30 CapitalBalance-Floyd $        51,940 (0.7*74200 CapitalBalance-DeWitt $        22,260 (0.3*74200) Account Debit Credit Capital-Floyd $        56,140 (51940+4200) Capital-DeWitt $        24,060 (22260+1800) Cash $ 80,200

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