On November 1, the firm of Bowes, Simmons, and Ahmed decided to liquidate itspartnership. The partners have capital balances of $57,860, $72,160, and $9,510, respectively. The cash balance is $31,560, the book values of noncash assets total $128,340, and liabilities total $20,370. The partners share income and losses in the ratio of 2:2:1.

Required:

1.

Prepare a statement of partnership liquidation, covering the period November 130, for each of the following independent assumptions:

a.

All of the noncash assets are sold for $156,000 in cash, the creditors are paid, and the remaining cash is distributed to the partners.*

b.

All of the noncash assets are sold for $55,320 in cash, the creditors are paid, the partner with the debit capital balance pays the amount owed to the firm, and the remaining cash is distributed to the partners.*

* Be sure to complete the statement heading. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers (balance deficiencies, payments, cash distributions, divisions of loss), use a minus sign. If there is no amount to be reported for sale of assets, payment of liabilities, receipt of deficiency, or cash distribution rows, the cell can be left blank. However, in the balance rows, a balance of zero MUST be indicated by entering "0".

2.

Assume the partner with the capital deficiency in part (b) declares bankruptcy and is unable to pay the deficiency. Journalize the entries on Nov. 30 to (a) allocate the partners deficiency and (b) distribute the remaining cash. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

1. a. Prepare a statement of partnership liquidation, covering the period November 130. Assume that all of the noncash assets are sold for $156,000 in cash, the creditors are paid, and the remaining cash is distributed to the partners. Be sure to complete the statement heading. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers (balance deficiencies, payments, cash distributions, divisions of loss), use a minus sign. If there is no amount to be reported for sale of assets, payment of liabilities, receipt of deficiency, or cash distribution rows, the cell can be left blank. However, in the balance rows, a balance of zero MUST be indicated by entering "0".

Bowes, Simmons, and Ahmed

Statement of Partnership Liquidation

1		Cash +	Noncash Assets =	Liabilities +	Capital, Bowes (2/5) +	Capital, Simmons (2/5) +	Capital, Ahmed (1/5)
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1. b. Prepare a statement of partnership liquidation, covering the period November 130. Assume that all of the noncash assets are sold for $55,320 in cash, the creditors are paid, the partner with the debit capital balance pays the amount owed to the firm, and the remaining cash is distributed to the partners. Be sure to complete the statement heading. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers (balance deficiencies, payments, cash distributions, divisions of loss), use a minus sign. If there is no amount to be reported for sale of assets, payment of liabilities, receipt of deficiency, or cash distribution rows, the cell can be left blank. However, in the balance rows, a balance of zero MUST be indicated by entering "0".

Bowes, Simmons, and Ahmed

Statement of Partnership Liquidation

1		Cash +	Noncash Assets =	Liabilities +	Capital, Bowes (2/5) +	Capital, Simmons (2/5) +	Capital, Ahmed (1/5)
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8	Balances
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2. Assume the partner with the capital deficiency in part (b) declares bankruptcy and is unable to pay the deficiency. Journalize the entries on Nov. 30 to (a) allocate the partners deficiency and (b) distribute the remaining cash. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

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JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
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