Question
Question 4: Liquidation: (10 Points) A1, B1, C1 & C2 Following is the balance sheet of Prem Partnership at the end of 2014: Other information:
Question 4: Liquidation: (10 Points)
A1, B1, C1 & C2 Following is the balance sheet of Prem Partnership at the end of 2014:
Other information:
- The partnership sold the inventories of $100,000 cash; plant assets of $210,000 and collect $120,000 of Account receivable balance.
- The partnership paid all its liabilities.
- The partners agreed to absorb of Saras capital deficiency.
- Capital and income ratio: 5:2:3 respectively.
Prepare a cash distribution schedule OR record the necessary journal entry for each step of partnership liquidation. (10 marks)
| Prem partnership Balance Sheet at 31 December 2014 | |
| Cash | $50,000 |
| Account receivables | $140,000 |
| Inventories | $110,000 |
| Net Plant Assets | $200,000 |
| Total Assets | $500,000 |
| Account payable | $150,000 |
| Accruals | $50,000 |
| Sara, capital | ($20,000) |
| Reem, capital | $70,000 |
| Rami, capital | $250,000 |
| Total Liabilities and Owners Equity | $500,000 |
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Retail Industry IRS Audit Technique Guide
Authors: Internal Revenue Service
1st Edition
1304114783, 978-1304114785
