P12-31A Allocating profits and losses to the partners, accounting for the liquidation of a partnership

ABC is a partnership owned by Alders, Byron, and Calvin, who share profits and losses in the ratio of 1:3:4. The account balances of the partnership at June 30 follow.

ABC

Adjusted Trial Balance

June 30, 2014

Balance

Account Title Debit Credit

Cash $ 33,000

Non-Cash Assets 117,000

Notes Payable $ 32,000

Alders, Capital 22,000

Byron, Capital 50,000

Calvin, Capital 53,000

Alders, Withdrawals 9,000

Byron, Withdrawals 27,000

Calvin, Withdrawals 49,000

Sales Revenue 164,000

Salaries Expense 74,000

Rent Expense 12,000

Total $321,000 $321,000

Requirements:

1. Prepare the June 30 entries to close the revenue, expense, income summary, and withdrawals accounts.

2. Open each partners capital T-account with the adjusted balance, post the closing entries to their accounts, and determine each partners ending capital balance.

3. Prepare the June 30 entries to liquidate the partnership assuming the non-cash assets are sold for $120,000