On March 1, 20X9, the ABC partnership decided to complete a lump-sum liquidation as soon as possible.
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Question:
On March 1, 20X9, the ABC partnership decided to complete a lump-sum liquidation as soon as possible. The partnership balance sheet prepared on March 1 appears below:
| ABC Partnership | |||
| Balance Sheet | |||
| March 1, 20X9 | |||
| Cash | $ 50,000 | Accounts Payable | $ 200,000 |
| Accounts Receivable | 60,000 | Due to Partner A | 30,000 |
| Inventory | 100,000 | A, Capital (30%) | 350,000 |
| Investments | 40,000 | B, Capital (40%) | 80,000 |
| Plant and Equipment-Net | 650,000 | C, Capital (30%) | 240,000 |
| Total Assets | $ 900,000 | Total Liability and Capital | $ 900,000 |
The partners share profits and losses in the ratio of 3:4:3. Partner B is personally insolvent, but partners A and C have sufficient personal assets to satisfy any capital deficits. On March 15, 20X9, the noncash assets were sold for $550,000. Lump-sum payments are made to the partners on March 16, immediately after the creditors have been paid.
Required:
Prepare a statement of partnership realization and liquidation.
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