The partners share net income and losses in the ratio of 3:2:1. Between May 7-30
ID: 2465705 • Letter: T
Question
The partners share net income and losses in the ratio of 3:2:1. Between May 7-30, the noncash assets were sold for $150,000, the liabilities were paid, and the remaining cash was distributed to the partners.
a. Prepare a statement of partnership liquidation. If an amount box does not require an entry, leave it blank or enter "0".
Anna, Brian, and Cole
Statement of Partnership Liquidation
For Period May 7-30
Cash +
Noncash Assets =
Liabilities +
Capital Anna (3/6) +
Capital Brian (2/6) +
Capital Cole (1/6)
Balances before realization
$
$
$
$
$
$
Sale of assets & division of gain
Balances after realization
$
$
$
$
$
Payment of liabilities
Balances after payment of liabilities
$
$
$
$
Distribution of cash to partners
Final balances
b. Assume the same facts as in (a), except that the noncash assets were sold for $45,000 and any partner with a capital deficiency pays the amount of the deficiency to the partnership. Prepare a statement of partnership liquidation. If an amount box does not require an entry, leave it blank or enter "0".
Anna, Brian, and Cole
Statement of Partnership Liquidation
For Period May 7-30
Cash +
Noncash Assets =
Liabilities +
Capital Anna (3/6) +
Capital Brian (2/6) +
Capital Cole (1/6)
Balances before realization
$
$
$
$
$
$
Sale of assets & division of loss
Balances after realization
$
$
$
$
$
Payment of liabilities
Balances after payment of liabilities
$
$
$
$
Receipt of deficiency
Balances
$
$
$
Distribution of cash to partners
Final balances
Hidea. Prepare a statement of partnership liquidation. If an amount box does not require an entry, leave it blank or enter "0".
Anna, Brian, and Cole
Statement of Partnership Liquidation
For Period May 7-30
Cash +
Noncash Assets =
Liabilities +
Capital Anna (3/6) +
Capital Brian (2/6) +
Capital Cole (1/6)
Balances before realization
$
$
$
$
$
$
Sale of assets & division of gain
Balances after realization
$
$
$
$
$
Payment of liabilities
Balances after payment of liabilities
$
$
$
$
Distribution of cash to partners
Final balances
Explanation / Answer
a statement of partnership liquidation:
Cash + non cash assets = liabilities + Ana + Brain + Cole
Before realisation 7500 105000 = 27500 45000 15000 25000
sale of non cash assets 150000 -105000 = 22500 15000 7500
Balance after realisation 157500 0 = 27500 67500 30000 32500
Payment of liabilities -27500 0 = -27500
Balance after payment 130000 0 = 0 67500 30000 32500
Distribution of cash -130000 0 = 0 -67500 -30000 -32500
Final balance 0 0 = 0 0 0 0
Note:- profit on sale of non cash assets =$150000 - $105000
= $45000
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