Partners Maness and Joiner have decided to liquidate their business. The ledger shows the following account balances:
Question:
Partners Maness and Joiner have decided to liquidate their business. The ledger shows the following account balances:
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Maness and Joiner share profits and losses in an 8:2 ratio. During the first month of liquidation, half the inventory is sold for $40,000, and $10,000 of the accounts payable is paid. During the second month, the rest of the inventory is sold for $30,000, and the remaining accounts payable are paid. Cash is distributed at the end of each month, and the liquidation is completed at the end of the second month.
Required
Prepare a statement of partnership realization and liquidation with a schedule of safe payments for the two-month liquidationperiod.
Liquidation in finance and economics is the process of bringing a business to an end and distributing its assets to claimants. It is an event that usually occurs when a company is insolvent, meaning it cannot pay its obligations when they are due.... 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...
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Advanced Financial Accounting
ISBN: 978-0078025624
10th edition
Authors: Theodore E. Christensen, David M. Cottrell, Richard E. Baker
