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: points Credit Debit $20.000 71.000 57,000 194,000 eBook Cash Accounts Receivable Inventory Machinery and Equipment (net) Accounts Payable Art, Capital Bru, Capital Chou, Capital References $55.000 93,000 115,000 79,000 $342,000 $342,000 Total The partners plan a program of plecemeal 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 $55,000 on accounts receivable; the balance is uncollectible. 2. Received $41,000 for the entire inventory 3. Paid $3,000 liquidation expenses. 4. Paid $52.100 to creditors, after offset of a $2,900 credit memorandum received on January 11, 20X1. 5. Retained $12,000 cash in the business at the end of the month for potential unrecorded liabilities and anticipated expenses. February 20X1 6. Paid $5,000 liquidation expenses. 7. Retained $7,000 cash in the business at the end of the month for potential unrecorded liabilities and anticipated expenses. March 20X1 8. Received $150,000 on sale of all items of machinery and equipment 9. Paid $6,000 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.) 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 For the period from January 1, 20X1, through March 31, 20X1 Capital Balances Other Accounts Cash Art Bru Chou Assets Payable Balances 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 creditors Safe payments to partners February transactions: Liquidation expenses paid Safe payments to partners March transactions: Sale of M&Eq. at a loss Liquidation expenses paid Payments to partners Balances at end of liquidation, March 31, 20X1 Chou 20% APB PARTNERSHIP Schedule of Safe Payments to Partners Art Bru 50% 30% Schedule 1: January 31, 20X1 Capital balances Potential Loss on noncash assets Allocation of potential deficit Safe payment, January 31, 20X1 Schedule 2: February 27, 20X1 Capital balances Potential Loss on noncash assets
