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**Will give thumbs up for correct answer** A partnership has the following account balances at the date of termination: Cash, $94,000; Noncash Assets, $730,000; Liabilities,
**Will give thumbs up for correct answer**
A partnership has the following account balances at the date of termination: Cash, $94,000; Noncash Assets, $730,000; Liabilities, $504,000; B, capital (50% of profits and losses), $150,000; M, capital (30%), $100,000; S, capital (20%), $70,000. The following transactions occur during liquidation:
- Noncash assets with a book value of $570,000 are sold for $470,000 in cash.
- A creditor reduces his claim against the partnership from $120,000 to $90,000, and this amount is paid in cash.
- The remaining noncash assets are sold for $130,000 in cash.
- The remaining liabilities of $384,000 are paid in full.
- Liquidation expenses of $21,000 are paid in cash.
- Cash remaining after the above transactions have occurred is distributed to the partners.
Prepare a statement of partnership liquidation to determine how much cash each partner receives from the liquidation of the partnership. (Amounts to be deducted should be entered with a minus sign.)
Statement of Partnership Liquidation Noncash Cash Liabilities Assets Bell, Capital (50%) Mann, Capital (30%) Scott, Capital (20%) Beginning balances Sale of noncash assets Pay liabilities Sale of remaining noncash assets Pay remaining liabilities Pay liquidation expenses Subtotal Distribution to partners Ending balancesStep by Step Solution
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