25. Th 20X9: e partnership of Robbi, Alex, and Ned has the following trial balan

Question

25. Th 20X9: e partnership of Robbi, Alex, and Ned has the following trial balance on September 30, Debit Cash Accounts Receivable (net) Inventory Plant and Equipment (net) Accounts Payable Rachel, Capital Adams, Capital Nixon, Capital Total $20,000 30,000 35,000 215,000 $40,000 120,000 90,000 50,000 -300,0000 $300,000 The partners share profits and losses as follows: Robbi, 50 percent: Alex, 30 percent; and Ned 20 percent. The partners have decided to liquidate their partnership by installments. Cash is distributed to the partners at the end of each month. A summary of the liquidation transactions follows: October 1. $25,000 is collected on accounts receivable; balance is uncollectible. 2. $20,000 received for the entire inventory. 3. $1,500 liquidation expense paid. 4. S40,000 paid to creditors. 5. $10,000 cash retained in the business at the end of the month. November 6. $2,000 in liquidation expenses paid. 7. As part payment of his capital, Ned accept which had a book value of $8,000. The partners on this item for liquidation purposes. 8. S4,000 cash retained in the business at the end of the month. December 9. $150,000 received on sale of remaining plant and equipment. 10. $1,000 liquidation expenses paid. No cash retained in the business. ed an item of special equipment that he developed, agreed that a value of $12,000 should be placed Required: (11 pts) Prepare payments to partners. a statement of partnership realization and liquidation with supporting schedules of safe

Explanation / Answer

Notes

Notes

Similarly for November and December

Statement of Partnership Liquidation and Realization Amount in $ Particulars Cash Accounts Receivable Inventory Plant and Equipment Accounts Payable Capital Balance Robbi(50%) Alex(30%) Ned(20%) Balance as on Sep 30(Before Realization) 20000 30000 35000 215000 -40000 -120000 -90000 -50000 October Cash Collected from Accounts Receivable 25000 -25000 Bad Debts -5000 2500 1500 1000 Amount received from Inventory 20000 -20000 Inventory Written off -15000 7500 4500 3000 Liquidation Expenses paid -1500 750 450 300 Amount paid to creditors -40000 40000 Balance Cash 23500 Cash Retained in the Business 10000 Balance distributed to Partners -13500 6750 4050 2700 Closing Balances 10000 -102500 -79500 -43000 November Balance as on October 31 10000 0 0 215000 0 -102500 -79500 -43000 Liquidation Expenses Paid -2000 1000 600 400 Increase in Value of Equipment 4000 -2000 -1200 -800 Disribution of Equipment to Ned -12000 12000 Balance Cash 8000 Cash Retained in Business 4000 Balance Cash Distributed to Partners -4000 2000 1200 800 Closing Balances 4000 207000 -101500 -78900 -30600 December Balance as on November 30 4000 207000 -101500 -78900 -30600 Cash received from Plant and Equipment 150000 -150000 Loss on sale of Plant and Equipment -57000 28500 17100 11400 Liquidation Expenses Paid -1000 500 300 200 Balance Cash 153000 0 -72500 -61500 -19000 Cash Distributed to Partners -153000 72500 61500 19000 Closing Balance 0 0 0 0 0 0 0 0

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