P16-14 Installment Liquidation (AICPA Adapted) LO 16-3 On January 1, 20X1. partners Art, Bru, and Chou, who share profits and losses in the ratio of 6:3:1, respectively, decide to liquidate their partnership. The partnership trial balance at this date follows: Credit Debit $ 21600 75,000 1,00 190.000 Cash Accounts Receivable Inventory Machinery and Equipment (net) Accounts Payable Art, Capital Bru, capital Chou, Capital Tolal $ 56,500 97,000 119,00 83,290 $195 60 3355.600 The partners plana 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 $58,200 on accounts receivable; the balance is uncollectible, 2 Received $43.400 for the entire inventory 3. Pald $3,800 liquidation expenses. 4. Pald $52500 to creditors, after offset of a $4,700 credit memorandum recelved on January 11, 20X1 5. Retained $12.500 cash in the business at the end of the month for potential unrecorded liabilities and anticipated expenses. February 20x1 6. Pald $5,800 liquidation expenses. 7. Retained $6,700 cash in the business at the end of the month for potential unrecorded liabilities and anticipated expenses. March 20X1 8. Received $154,800 on sale of all items of machinery and equipment 9. Pald $4,200 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 quidation For the period from January 1, 20X1. through March 31, 20x1 Other Assets Accounts Payable 334 000 56,600 Capital Balances Art Bru 07.000 119,000 21,600 Chou 83.000 58,200 Balances before liquidabon, 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 43.400 16,800 17,600 10.080 10.560 2.280 5,040 5.2801 1.140 1.680 1.780 380 3.800 S 299,600S 50,600 62.800 $ 12,500 50,300 $ 56,600 s S Safe payments to partners 74,080 30.180 43,000 107,540 5 15.090 92,4505 79,180 5,030 74.150 S 290,800 $ 58,600 $ S February transactions Liquido expenses paid 5,800 44,500 $ S 299,6005 3.480 40.420 S 56,000 $ 1.740 90,710 3 580 73,570 Safe payments to parers S 44,500 $ 298,800 56,600 $ 40.420 s 90,710 5 73,570 March transactions Sale of MLEQ, at a loss Liquidation Expenses paid S 44,500 5 299,600 $ 58,6005 40.420 S 90,710 $ 73.570 Payments to partners Balances at end of liquidation March 31, 20X1 S 44,500 5 290,000 $ 58,600 5 40.420 5 90,710 5 73,570 Chou 10% ABC PARTNERSHIP Schedule of Safe Payments to Partners Art Bru 60% 30% Schedule 1 January 31, 20X1 Capital balances Potential Losses and Expenses s os Allocation of potential deficit Sale payment January 31, 20x1 S os 0ls 0 0 $ 0 Schedule 2 February 27, 20X1 Capital balances Potential Losses and Expenses $ des os C Allocation of potential deficit Safe payment. February 27, 20X1 $ 05 05 0