On January 1, 20X1, partners Art, Bru, and Chou, who share profits and losses in the ratio of 5 3 2, respectively, decide to liquidate their partnership The partnership trial balance at this date follows Debit Credit Cash $ 19,800 Accounts Receivable 70,500 Inventory 56,500 Machinery and Equipment (net) 193,500 Accounts Payable $ 54,800 Art, Capital 92,500 Bru, Capital 114,500 Chou, Capital 78,500 Total $ 340,300 $ 340,300 The partners plan a program of piecemeal conversion of assets to minimize liquidation losses All available cash, less an amount retained to provide for future expenses, is to be distributed to the partners at the end of each month A summary of the liquidation transactions follows January 20X1 Collected $54,600 on accounts receivable the balance is uncollectible Received $40,700 for the entire inventory Paid $2,900 liquidation expenses Paid $52,200 to creditors, after offset of a $2,600 credit memorandum received on January 11, 20X1 Retained $11,800 cash in the business at the end of the month for potential unrecorded liabilities and anticipated expenses February 20X1 Paid $4,900 liquidation expenses Retained $6,900 cash in the business at the end of the month for potential unrecorded liabilities and anticipated expenses March 20X1 Received $149,600 on sale of all items of machinery and equipment Paid $5,900 liquidation expenses Retained no cash in the business Required Prepare a statement of partnership liquidation for the partnership with schedules of safe payments to partners (Round your answers to nearest whole dollar )

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 14, 2024

On January 1, 20X1, partners Art, Bru, and Chou, who share profits and losses in the ratio of 5:3:2, respectively, decide to liquidate their partnership.

On January 1, 20X1, partners Art, Bru, and Chou, who share profits and losses in the ratio of 5:3:2, respectively, decide to liquidate their partnership. The partnership trial balance at this date follows:

	Debit			Credit
Cash		$	19,800
Accounts Receivable			70,500
Inventory			56,500
Machinery and Equipment (net)			193,500
Accounts Payable					$	54,800
Art, Capital						92,500
Bru, Capital						114,500
Chou, Capital						78,500
Total		$	340,300		$	340,300

The partners plan a program of piecemeal conversion of assets to minimize liquidation losses. All available cash, less an amount retained to provide for future expenses, is to be distributed to the partners at the end of each month. A summary of the liquidation transactions follows: January 20X1

Collected $54,600 on accounts receivable; the balance is uncollectible.
Received $40,700 for the entire inventory.
Paid $2,900 liquidation expenses.
Paid $52,200 to creditors, after offset of a $2,600 credit memorandum received on January 11, 20X1.
Retained $11,800 cash in the business at the end of the month for potential unrecorded liabilities and anticipated expenses.

February 20X1

Paid $4,900 liquidation expenses.
Retained $6,900 cash in the business at the end of the month for potential unrecorded liabilities and anticipated expenses.

March 20X1

Received $149,600 on sale of all items of machinery and equipment.
Paid $5,900 liquidation expenses.
Retained no cash in the business.

Required: Prepare a statement of partnership liquidation for the partnership with schedules of safe payments to partners. (Round your answers to nearest whole dollar.)