QS 12-9 Liquidation of partnership LO P5 [The following information applies to the questions displayed below.] The Field, Brown & Snow partnership was begun with investments by the partners as follows: Field, $131,250; Brown, $165,000; and Snow, $153,750. The partners decide to liquidate, sharing all losses equally. On May 31, after all assets were sold and all creditors were paid, only $45,000 in partnership cash remained. QS 12-9 Part 1 1. Compute the capital account balance of each partner after the liquidation of assets and payment of creditors. (Losses and negative capital balances, if any, should be entered with a minus sign.) Field Brown Snow Total Initial investments Allocation of gains (losses) Capital balances QS 12-9 Part 2 2. Assume that the partner with a deficit pays cash to cover the deficit. Prepare the journal entries on May 31 to record (a) the cash payment to cover the deficit and (b) the final disbursement of cash to the partners. View transaction list Journal entry worksheet Record the payment of cash to cover the deficit. Note: Enter debits before credits. 2. Assume that the partner with a deficit pays cash to cover the deficit. Prepare the journal entries on May 31 to record (a) the cash payment to cover the deficit and (b) the final disbursement of cash to the partners. View transaction list Journal entry worksheet Record the disbursement of the remaining cash to the partner(s). Note: Enter debits before credits. QS 12-9 Part 3 3. Assume that the partner with a deficit does not reimburse the partnership. Prepare journal entries (a) to transfer the deficit to the other partners and (b) to record the final disbursement of cash to the partners. View transaction list Journal entry worksheet Record the transfer of the deficit to the other partner(s). Note: Enter debits before credits. Transaction General Journal Debit Credit (a) QS 12-9 Part 3 3. Assume that the partner with a deficit does not reimburse the partnership. Prepare journal entries (a) to transfer the deficit to the other partners and (b) to record the final disbursement of cash to the partners. View transaction list Journal entry worksheet