On January 1, 20x1, partners Art, Bru, and Chou, who share profits and losses in the ratio of 6:2:2, respectively, decide to liquidate their partnership. The partnership trial balance at this date follows: Credit Debit $ 18,400 67,000 53,000 190,000 Cash Accounts Receivable Inventory Machinery and Equipment (net) Accounts Payable Art, Capital Bru, Capital Chou, Capital Total $ 53,400 89,000 111,000 75,000 $328,400 $328,400 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 1. Collected $51800 on accounts receivable; the balance is uncollectible. 2. Received $38,600 for the entire inventory. 3. Paid $2.200 liquidation expenses. 4. Paid $50,200 to creditors, after offset of a $3,200 credit memorandum received on January 11, 20x1. 5. Retained $10,400 cash in the business at the end of the month for potential unrecorded liabilities and anticipated expenses. February 20X1 6. Paid $4,200 liquidation expenses. 7. Retained $6.200 cash in the business at the end of the month for potential unrecorded liabilities and anticipated expenses. February 20X1 6. Paid $4,200 liquidation expenses. 7. Retained $6,200 cash in the business at the end of the month for potential unrecorded liabilities and anticipated expenses. March 20X1 8. Received $146,800 on sale of all items of machinery and equipment 9. Pald $5,200 liquidation expenses. 10. 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 answerf to nearest whole dollar.) ABC PARTNERSHIP Statement of Partnership Realization and Liquidation For the period from January 1, 20X1, through March 31, 20X1 Capital Balances Bru Other Assets Accounts Payable Art Chou Cash 18.400 Balances before liquidation, January 1, 20X1 January transactions: Collection of accounts receivable at a loss Sale of inventory at a loss Liquidation expenses pald Share of credit memorandum 51,800 38,600 (2.200) ir Safe payments to partners (46.000) 10.400 $ $ 0 $ 0 $ 0$ 0 $ 0 February transactions: Liquidation expenses paid (4.200) 6,200 $ $ os 0 $ 0 $ 0 $ 0 Safe payments to partners $ 6.200 $ os 0 $ 05 0 $ 0 March transactions: Sale of M&Eq. at a loss Liquidation expenses pald $ 6.200 $ 0 $ 0 $ 0 $ 0 $ 0 Payments to partners Balances at end of liquidation, March 31, 20X1 $ 6,200 $ 0 $ 0 $ os 0 $ 0 Chou ABC PARTNERSHIP Schedule of Safe Payments to Partners Art Bru 60% 20% Schedule 1: January 31, 20X1 Cantal halen AS 20% Chou 20% ABC PARTNERSHIP Schedule of Safe Payments to Partners Art Bru 60% 20% Schedule 1: January 31, 20X1 Capital balances Potential Losses and Expenses $ 0 $ Allocation of potential deficit Safe payment, January 31, 20X1 $ 0 $ 0 $ 0 0 $ 0 Schedule 2: February 27, 20X1 Capital balances Potential Losses and Expenses $ 0 $ 0 $ 0 Allocation of potential deficit Safe payment, February 27, 20X1 $ 0 $ ols 0
