Adams, Peters, and Blake share profits and losses for their APB Partnership in a ratio of 2:3:5. When they decide to liquidate, the balance sheet is as follows: Assets Cash Adams, Loan Other Assets $ 40,000 10,000 200,000 Liabilities and Capital Liabilities Adams, Capital Peters, Capital Blake, Capital Total Liabilities and Equities $ 50,000 55,000 75,000 70,000 $250,000 Total Assets $250,000 Liquidation expenses are expected to be negligible. No interest accrues on loans with partners after termination of the business. During the liquidation process for the APB Partnership, the following events occurred: 1. During the first month of liquidation, noncash assets with a book value of $85,000 were sold for $65,000, and $21,000 of the liabilities were paid. 2. During the second month, the remaining noncash assets were sold for $79,000. The loan receivable from Adams was collected, and the rest of the creditors were paid. 3. Cash is distributed to partners at the end of each month. Required: Prepare a statement of partnership realization and liquidation with a schedule of safe payments to partners for the liquidation period. Please follow the practical guidelines when completing this worksheet. APB PARTNERSHIP Statement of Partnership Realization and Liquidation Installment Liquidation Capital Peters Cash Adams, Loan Noncash Assets Liabilities 40,000 $ 10,000 $ 200,000 $ 50,000 $ Adams 55,000 $ Blake 70,000 $ 75,000 $ Balances Adam's loan write-off Sale of assets Payment to creditors $ 40,000 $ 10,000 $ 200,000 $ 50,000 $ 55,000 $ 75,000 $ 70,000 Payment to partners $ 40,000 $ 10,000 $ 200,000 $ 50,000 $ 55,000 $ 75,000 $ 70,000 Sale of assets Statement of Partnership Realization and Liquidation Installment Liquidation Cash Adams, Loan Noncash Assets Liabilities Adams 40,000 $ 10,000 $ 200,000 $ 50,000 $ 55,000 $ Capital Peters 75,000 $ Blake 70,000 $ Balances Adam's loan write-off Sale of assets Payment to creditors $ 40,000 $ 10,000 $ 200,000 $ 50,000 $ 55,000 $ 75,000 $ 70,000 Payment to partners $ 40,000 $ 10,000 $ 200,000 $ 50,000 $ 55,000 $ 75,000 $ 70,000 Sale of assets Payment to creditors $ 40,000 $ 10,000 $ 200,000 $ 50,000 $ 55,000 $ 75,000 $ 70,000 Payment to partners Balances $ 40,000 $ 10,000 $ 200,000 $ 50,000 $ 55,000 $ 75,000 $ 70,000 APB PARTNERSHIP Schedule of Safe Payments to Partners Adams Peters 20% 30% Capital balances, end of first month Potential Loss on assets Blake 50% Safe payment to partners
