Part A (2019)

Partnership A, B & C is a law firm. You have been engaged as accountant to prepare financial statements for the year ended December 31, 2019

The partnership's trial balance is shown on the "2019 Tr. Bal" page (see tab below). Salary expenses listed on the trail balance are each partner's withdrawals for the year.

Partnership profits are allocated based first on salaries, then on interest on opening capital balances, then on a fixed ratio.

Salary allocation amounts are:

A $100,000

B $100,000

C $160,000

Opening Capital balances are:

A $70,000

B $60,000

C $70,000

Interest Rate: 5%

Fixed ratio is:

A 2

B 3

C 5

REQUIRED

1. Prepare year-end adjusting entries. No descriptions are necessary

2. Allocate partnership profit or loss to each partner. Prepare the necessary adjusting entry.

3. Post the adjusting entries and complete the trail balance.

4. Prepare an income statement and statement of partner's capital for the year ended December 31, 2019 and a balance sheet at Dec 31.

PART B (2020)

a. on Dec 31, 2020 new partner D invests other assets into the partnership for a one-quarter ownership interest. An equal amount of capital is contributed by A, B, and C to make up the difference. At Dec 31, 2020, the partner's capital balances are as follows:

A $200,000

B $180,000

C $190,000

$570,000

Fair value of other assets from D $50,000

b. immediately after this, partner C withdraws from the partnership. She is paid in cash the balance in her capital account plus a bonus, contributed equally from the capital balances of A, B, and D.

Bonus paid to C $18,000

REQUIRED:

5. Prepare necessary adjusting entries at Dec 31, 2020 to record the admission of partner D and the withdrawal of partner C. Show all calculations.

PART C (2021 and 2022)

The trail balance of A, B, and D at December 31, 2021 after all adjustments have been made is as follows:

Adjusted Balances

Account Title	Debit	Credit
Cash	83,000
Other Assets	80,000
Accounts Payable		140,000
A, Capital		7,000
B, Capital		7,000
C, Capital		9,000
	163,000	163,000

On Jan 1, 2022 the partnership is liquidated. Other assets are sold for: $144,000

Gains and losses are liquidated in a ration of:

A 3

B 2

C 5

REQUIRED:

6. Print out the "Part Liqu" (see tab below). Complete the schedule. Assume any partner deficiency (debit balance) is repaid with cash by the applicable partner.

7. Prepare the journal entries to record the liquidation.

****Below are the forms required to input the data and figures onto. This format is required and I kindly ask that you follow these spreadsheet examples so I can follow along with the data.******

A, B, and C GENERAL JOURNAL Description Debit Credit Total C Amount of profit Salary allocation Balance Interest allocation: pening Rate . Balance Fixed ratio A B Balance Allocated to partners A, B, and C Trial Balance At December 31, 2019 Adjusting Entries Debit Unadjusted Balances Adjusted Balances Debit Credit Credit Debit Credit Account Title # Cash Accounts Receivable Accounts Payable A, Capital A, Withdrawals , apital B, Withdrawals C, Capital C, Withdrawals Income Summary Fees Revenue Office Expense |Salaries Expense - A Salaries Expense B Salaries Expense C 90,000 500,000 90,000 130,000 190,000 150,000 900,000 500,000 160,000 100,000 110,000 1,460,000 1,460,000 A, B, and C Income Statement For the Year Ended December 31, 2019 A, B, and C Statement of Partners' Capital For the Year Ended December 31, 2019 A Total Bal. at Jan 1, 2019 Bal. at Dec. 31, 2019 A, B, and C Balance Sheet At December 31, 2019 Liabilities Assets Partners' Equity A, B, and D Statement of Partnership Liquidation For the Day Ending January 1, 2022 Accounts Partners' capital Cash Other assets payable A Opening balance Allocation of gain (loss) Ratio Amount A, B, and C GENERAL JOURNAL Description Debit Credit Total C Amount of profit Salary allocation Balance Interest allocation: pening Rate . Balance Fixed ratio A B Balance Allocated to partners A, B, and C Trial Balance At December 31, 2019 Adjusting Entries Debit Unadjusted Balances Adjusted Balances Debit Credit Credit Debit Credit Account Title # Cash Accounts Receivable Accounts Payable A, Capital A, Withdrawals , apital B, Withdrawals C, Capital C, Withdrawals Income Summary Fees Revenue Office Expense |Salaries Expense - A Salaries Expense B Salaries Expense C 90,000 500,000 90,000 130,000 190,000 150,000 900,000 500,000 160,000 100,000 110,000 1,460,000 1,460,000 A, B, and C Income Statement For the Year Ended December 31, 2019 A, B, and C Statement of Partners' Capital For the Year Ended December 31, 2019 A Total Bal. at Jan 1, 2019 Bal. at Dec. 31, 2019 A, B, and C Balance Sheet At December 31, 2019 Liabilities Assets Partners' Equity A, B, and D Statement of Partnership Liquidation For the Day Ending January 1, 2022 Accounts Partners' capital Cash Other assets payable A Opening balance Allocation of gain (loss) Ratio Amount