Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Matthews, Mitchell, and Michaels are partners in BG Land Development Company and share losses in a 5:4:1 ratio, respectively. The balance sheet on June
Matthews, Mitchell, and Michaels are partners in BG Land Development Company and share losses in a 5:4:1 ratio, respectively. The balance sheet on June 30, 20X1, when they decide to liquidate the business, is as follows: Assets Liabilities and Capital Cash Noncash Assets $ 27,000 147,000 Accounts Payable $ 37,000 Mitchell, Loan 14,000 Matthews, Capital 75,500 Mitchell, Capital 36,800 Michaels, Capital 10,700 Total Assets $ 174,000 Total Liabilities and Equities $ 174,000 The noncash assets are sold for $110,000. Required: a. Prepare a statement of partnership realization and liquidation. b. Prepare the required journal entries to account for the liquidation of BG Land Development Company. Required A Required B Prepare a statement of partnership realization and liquidation. BG LAND DEVELOPMENT COMPANY Statement of Partnership Realization and Liquidation Lump-Sum Distribution Balances Sale of assets Payment to creditors Outside Creditors Mitchell Payment to partners Balances Cash Noncash Assets Accounts Payable Mitchell Loan Matthews Capital Balances Mitchell Michaels Record the sale of the assets. Note: Enter debits before credits, Event 1 General Journal Debit Credit > A B C Record the payment to creditors. Note: Enter debits before credits. Event 2 General Journal Debit Credit > Record the final lump-sum distribution to the partners. Note: Enter debits before credits. Event 3 General Journal Debit Credit
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started