TOPIC: PARTNERSHIP DISSOLUTION

Give brief explanation on each requirement that shows the application of partnership dissolution.

Refer the problem set to Solman Millan 2019, Chapter 3: Partner Dissolution

Date B, Capital (182,600 x 1/2) 51.200 C. Capital (182,600 x 1/2) 51,200 to record the admission of C to the partnership Requirement (b): Before admission Admission of C After admission A, Capital 182,600 182,600 B. Capital 102,400 (51,200) 51,200 C. Capital 51,200 51.200 285,000 285,000 Requirement (c): Partner Before admission Admission of C After admission A 60% 60% 40% -20% 20% 20% 20% 100% 100%Case #1: Requirement (a): The capital balances of the existing partners are adjusted as follows: Carrying Fair Increase amts. values (Decrease) Cash 26,000 26,000 Accounts receivable 120,000 116,400 (3,600) Inventory 180,000 205,000 25,000 Prepaid asset 3,600 3,600 Accounts payable (62,000) (62,000) Accrued liabilities (4,000) (4,000) Net assets 264,000 285,000 21,000 Unadjusted Sh. in adjustment Adjusted A, Capital (60%) 170,000 (21K x 60%) = 12,600 182.600 B, Capital (40%) 94,000 (21K x 40%) = 8,400 102.400 264,000 285,000