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After closing the accounts on July 1, prior to liquidating the partnership, the capital account balances...

After closing the accounts on July 1, prior to liquidating the partnership, the capital account balances of Gold, Porter, and Sims are $55,000, $45,000, and $20,000, respectively. Cash, noncash assets, and liabilities total $56,000, $96,000, and $32,000, 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, 2016.

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Answer #1

1-FIRST OF FALL LETS CALCULATE THE AMOUNT DISTRIBUTABLE TO PARTNERS.

CASH-$56000

NON CASH ASSETS SALE VALUE-$90000

TOTAL ASSETS AVAILABLE=56000+90000=146000

LIABILITIES TO BE PAID=32000(IT WILL BE PAID OUT OF CASH ASSETS)

THEREFORE NET ASSETS AVAILABLE=146000-32000=114000$

LIQUIDATION STATEMENT-

PARTICULARS GOLD PORTER SIMS

CAPITAL 55000 45000 20000

ASSET DISTRIBUTION(3:2:1) = 57000 =36000 =19000

(114000/6)=19000 (19000*3) (19000*2) (19000*1)

THEREFORE TOTAL= 112000 81000 39000

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