The MFP Partnership is to be liquidated when the ledger shows the following: Cash ...... $50,000 Noncash

Question:

The MFP Partnership is to be liquidated when the ledger shows the following:

Cash ...... $50,000

Noncash Assets ... 200,000

Liabilities ..... 50,000

Moss, Capital ..... 75,000

Fairly, Capital .. 100,000

Pratt, Capital ... 25,000

Moss, Fairly, and Pratt's income ratios are 6:3:1, respectively.

Instructions

Prepare separate entries to record the liquidation of the partnership assuming that the noncash assets are sold for $150,000 in cash.

Liquidation
Liquidation in finance and economics is the process of bringing a business to an end and distributing its assets to claimants. It is an event that usually occurs when a company is insolvent, meaning it cannot pay its obligations when they are due.... Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...