Data for the Baylee Company partnership are presented in E12-12. In E12-12. At December 31, Baylee Company

Question:

Data for the Baylee Company partnership are presented in E12-12.

In E12-12.

At December 31, Baylee Company has cash of $40,000, equipment of $130,000, accumulated depreciation of $40,000, liabilities of $55,000, and the following partners' capital balances: H. Bayer $45,000 and J. Leech $30,000. The partnership is liquidated on December 31 of the current year and $100,000 cash is received for the equipment. Bayer and Leech share profits and losses equally.

Instructions

Prepare the entries to record (a) the sale of the equipment, (b) the allocation to the partners of the gain or loss on liquidation, (c) the payment of creditors, and (d) the distribution of cash to the partners.

Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most... Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...