Exercise 1: After the accounts balance are closed on April 10, 2012 prior the liquidation the partnership, the capital accounts of Smith, Johnson, and William are $56,800, $12,400 and $35,600 respectively. Cash and non cash assets total $18,900 and $142,400 respectively. Amounts owed to creditors total $56,500. The partners share income and losses in the ratio 2:1:1. In April 20, 2012, the non cash assets are sold for $80,000.

Follow the Instructions:

Prepare a statement of partnership liquidation.

Smith, Johnson and William

Statement of Partnership Liquidation

For Period April 10-20, 2012

	___________Capital___________ Cash + Noncash Assets = Liabilities + Smith + Johnson + William
Balances before realization
Sale of assets and division of loss
Balances after realization
Payment of liabilities
Balances after payment of liabilities
Cash distributed to partners
Final Balances