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Liquidating Partnerships Prior to liquidating their partnership, MacPherson and Ericson had capital accounts of $54,000 and...

Liquidating Partnerships

Prior to liquidating their partnership, MacPherson and Ericson had capital accounts of $54,000 and $93,000, respectively. Prior to liquidation, the partnership had no cash assets other than what was realized from the sale of assets. These partnership assets were sold for $139,000. The partnership had $4,000 of liabilities. MacPherson and Ericson share income and losses equally.

Determine the amount received by MacPherson as a final distribution from liquidation of the partnership.
$

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Answer #1

Macpherson equity to prior liquidation = $54,000

Realization of asset sale = $139,000

Book value of assets = Macpherson equity to prior liquidation + Ericson equity to prior liquidation + Partnership liability

= 54,000 + 93,000 + 4,000

= $151,000

Loss on liquidation = Realization of asset sale - Book value of assets

= 139,000 - 151,000

= - $12,000

Macpherson share of loss = 12,000 x 50%

= $6,000

MacPherson final distribution = 54,000 + 6,000

= $60,000

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