$9$:$5$

Problem $15$A$-5$

Partnership

Liquidation

$($L$.$O$.6)$

The balance sheet of the RED Partnership as of September $30,20$ is

below.

Ronnie, Edward, and Darrel share income and losses in the ratio of $5$:$3$:$2$

Because of economic conditions in their industry, the partners have agreed to

liquidate the business.

Required

Prepare journal entries to liquidate the partnership and distribute any remain$-$

ing cash. Assume that Ronnie cannot contribute any additional personal assets to

the company during liquidation and that the following transactions occurred dur$-$

ing liquidation: $($a$)$ Accounts receivable were sold for $60$ percent of their book

value. $($b$)$ Inventory was sold for $$46,000.($c$)$ Equipment was sold for $$50,000.$

$($d$)$ Accounts payable were paid in full. $($e$)$ Gain or loss from realization was

distributed to the partners' capital accounts. $($f$)$ Ronnie's deficit was transferred to

the remaining partners in their new profit and loss ratio. $($g$)$ The remaining cash

was distributed to the partners.

Prepare a statement of liquidation.