After closing the accounts on July 1, prior to liquidating the partnership, the
ID: 2359904 • Letter: A
Question
After closing the accounts on July 1, prior to liquidating the partnership, the capital account balances of Jessup, King, and Oliver are $70,000, $43,000, and $22,000, respectively. Cash, noncash assets, and liabilities total $62,000, $108,000, and $35,000, 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, 2012.Explanation / Answer
Please find the table as follows:
Cash
Non Cash Assets
Liabilities
Jessup
King
Oliver
Balances before realization
62000
108000
35000
70000
43000
22000
Sale of assets and distribution of loss between partners
90000
108000
9000
6000
3000
Balances after realization
152000
0
35000
61000
37000
19000
Payment of liabilities
35000
35000
Balance after payment of liabilities
117000
0
0
61000
37000
19000
Cash distributed to partners (in ratio of capital balances)
117000
61000
37000
19000
Final Balance
0
0
0
0
0
0
Cash
Non Cash Assets
Liabilities
Jessup
King
Oliver
Balances before realization
62000
108000
35000
70000
43000
22000
Sale of assets and distribution of loss between partners
90000
108000
9000
6000
3000
Balances after realization
152000
0
35000
61000
37000
19000
Payment of liabilities
35000
35000
Balance after payment of liabilities
117000
0
0
61000
37000
19000
Cash distributed to partners (in ratio of capital balances)
117000
61000
37000
19000
Final Balance
0
0
0
0
0
0
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