Question
A partnership has the following account balances at the date of termination: Cash, $82,000; Noncash Assets, $670,000; Liabilities, $410,000; Bell, capital (50 percent of profits
A partnership has the following account balances at the date of termination: Cash, $82,000; Noncash Assets, $670,000; Liabilities, $410,000; Bell, capital (50 percent of profits and losses), $165,000; Mann, capital (30 percent), $105,000; Scott, capital (20 percent), $72,000. The following transactions occur during liquidation:
Noncash assets with a book value of $510,000 are sold for $410,000 in cash.
A creditor reduces his claim against the partnership from $140,000 to $120,000, and this amount is paid in cash.
The remaining noncash assets are sold for $130,000 in cash.
The remaining liabilities of $270,000 are paid in full.
Liquidation expenses of $15,000 are paid in cash.
Cash remaining after the above transactions have occurred is distributed to the partners.
Prepare a statement of partnership liquidation to determine how much cash each partner receives from the liquidation of the partnership. (Amounts to be deducted should be entered with a minus sign.)
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