Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

00 PR 12-58 Statement of partnership liquidation OBJ. 4 After the accounts are closed on April 10, prior to liquidating the partnership, the capital accounts

image text in transcribed
image text in transcribed
00 PR 12-58 Statement of partnership liquidation OBJ. 4 After the accounts are closed on April 10, prior to liquidating the partnership, the capital accounts of Zach Fairchild, Austin Lowes, and Amber Howard are $42,000, $7,500, and $36,500, respectively. Cash and noncash assets total $23,500 and $84,500, respectively. Amounts owed to creditors total $22,000. The partners share income and losses in the ratio of 1:1:2. Between April 10 and April 30, the noncash assets are sold for $48,500, the partner with the capital deficiency pays the deficiency to the partnership, and the liabilities are paid. Instructions 1. Prepare a statement of partnership liquidation, indicating (a) the sale of assets and division of loss, (b) the payment of liabilities, (c) the receipt of the deficiency (from the appropriate partner), and (d) the distribution of cash. 2. Assume that the partner with the capital deficiency declares bankruptcy and is unable to pay the deficiency. Journalize the entries to (a) allocate the partner's deficiency and (b) distribute the remaining cash

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Night Comes To The Cumberlands A Biography Of A Depressed Area

Authors: Harry M. Caudill

1st Edition

1334682070, 978-1334682070

More Books

Students also viewed these Accounting questions

Question

What is an accrual?

Answered: 1 week ago

Question

Are the investments going to be supported by the stakeholders?

Answered: 1 week ago