P 17-5 Statement of partnership liquidation Eli, Joe, and Ned agree to liquidate their consulting practice as soon as possible after the close of business on July 31, 2016. The trial balance on that date shows the following account balances:

Debits Credits Cash $13,000 Accounts receivable 12,000 Furniture and fixtures 35,000 Accounts payable $ 6,000 Eli capital 24,000 Joe capital 15,000 Ned capital 15,000

$60,000 $60,000 The partners share profits and losses 20 percent, 30 percent, and 50 percent to Eli, Joe, and Ned, respectively, after Ned is allowed a monthly salary of $4,000.

August transactions and events are as follows:

1. The accounts payable are paid.

2. Accounts receivable of $8,000 are collected in full. Ned accepts accounts receivable with a face value and fair value of $3,000 in partial satisfaction of his capital balance. The remaining accounts receivable are written off as uncollectible.

3. Furniture with a book value of $25,000 is sold for $15,000.

4. Furniture with a book value of $4,000 and an agreed-upon fair value of $1,000 is taken by Joe in partial settlement of his capital balance. The remaining furniture and fixtures are donated to Goodwill Industries.

5. Liquidation expenses of $3,000 are paid.

6. Available cash is distributed to partners on August 31.

REQuIRED: Prepare a statement of partnership liquidation for the Eli, Joe, and Ned partnership for August.

Partnership Liquidation 589