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Lizza, Mary and Carrie who share in income and losses in the ratio of 2:3:5, decided to discontinue operations as of May 30, 2016, and
Lizza, Mary and Carrie who share in income and losses in the ratio of 2:3:5, decided to discontinue operations as of May 30, 2016, and liquidate their partnership. After the accounts were closed on May 30, 2016, the following trial balance was prepared:
Lizza, Mary and Carrie
Post - Closing Trial Balance
May 30, 2016
5/30/16 | |||||
Dr | Cr | ||||
Cash | 8000 | ||||
Non cash Assets | 107800 | ||||
Liabilities | 35700 | ||||
Lizza, Capital | 13140 | ||||
Mary, Capital | 25110 | ||||
Carrie, Capital | 41850 | ||||
115800 | 115800 | ||||
Between 4-1 and 4-18 the non cash assets were sold for 36800 and the liabilities were paid | |||||
Assuming that the partner with the capital deficiency pays the entire amount owed to the | |||||
partnership, prepare a statement of partnership liquidation. | |||||
Journalize the entries to record: | |||||
a. the sale of assets. | |||||
b. the division of loss on the sales of assets | |||||
c. the payment of liabilities. | |||||
d. the receipt of the deficiency | |||||
e. the distribution of cash to the partners |
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