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 $ 21,200 recounts Receivable 74,000 Inventory 60,000 Machinery and Equipment (net) 197,000 Accounts Payable $ 56,200 Art, Capital 96,000 Dru, Capital 110,000 Ches, Capital 82.000 Total $352,200 $352,200 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 $57,400 on accounts receivable: the balance is uncollectible. 2. Received $42,800 for the entire inventory 3. Paid $3,600 liquidation expenses 4. Paid $52,000 to creditors after offset of a $4,200 credit memorandum received on January 11, 20X1. 5. Retained $10,500 cash in the business at the end of the month for potential unrecorded liabilities and anticipated expenses. February 20X1 6. Pald $5,600 liquidation expenses, 7. Retained $4,900 cash in the business at the end of the month for potential unrecorded liabilities and anticipated expenses. March 20X1 8. Received $153,600 on sale of all items of machinery and equipment. 9. Pald $4,000 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 answers to nearest whole dollar.) ABC PARTNERSHIP Statement of Partnership Realization and Liquidation Required: Prepare a statement of partnership liquidation for the partnership with schedules of safe payments to partners. (Round your answers to nearest whole dollar.) ABC PARTNERSHIP Statement of Partnership Ronilation and Liquidation For the period from January 1, 20x1, through March 31, 20X1 Capital Balances Bru Cash Other Assets Accounts Payablo Art Chou Baiances before liquidation, January 1, 20X1 January transactions Collection of accounts receivable at a loss Sale of inventory at a loss Liquidation expenses paid Share of credit memorandum Payments to creditora Safo payments to partners February transactions Liquidation expenses pald Safe payments to partners March transactions Sale of M&E at a loss Liquidation expenses paid Payments to partners Balances at end of liquidation, March 31, 20X1 Anne ABC PARTNERSHIP Schedule of Safe Payments to Partners Art Bru 50% 30% Schedule 1: January 31, 20X1 Capital balances Potential Loss on noncash assets Chou 20% Allocation of potential deficit Safe payment, January 31, 20X1 Schedule 2: February 27, 20X1 Capital balances Potential Loss on noncash assets Allocation of potential deficit Safe payment, February 27, 20X1
