Question
Liquidations Liquidation of the partnership will consist of selling the assets, paying all liabilities, and paying to the partners cash equal to their adjusted capital
Liquidations
Liquidation of the partnership will consist of selling the assets, paying all liabilities, and paying to the partners cash equal to their adjusted capital and current account balances.
EXERCISE 1 (E12.8)
Wenyo Partnership decides to liquidate the firm on 31 December 2020.
The following balances appears in the records of the partnership:
| Cash Non-cash assets Liabilities Capital accounts: When You
| 20,000 100,000 55,000
45,000 20,000 |
| Profit sharing ratio | 60% and 40% |
The partnership is liquidated, and the assets are sold for $105,000
Required:
Prepare a schedule for cash payments and journalize the transactions.
Answer:
| Schedule of cash payments | |||||
| Details | Cash | Non-cash Assets | Liabilities | Cap Wen | Cap You |
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| Journal entries | DR | CR |
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Hardening By Auditing A Handbook For Measurably And Immediately Iimrpving The Security Management Of Any Organization
Authors: Eugene A. Razzetti
1st Edition
1665562609, 978-1665562607
