Question

After closing the accounts on July 1, prior to liquidating the partnership, the capital account balances of Gold, Porter, and Sims are $28,500, $40,200, and $18,000, respectively. Cash, noncash assets, and liabilities total $45,900, $74,700, and $33,900, respectively. Between July 1 and July 29, the noncash assets are sold for $59,700, the liabilities are paid, and the remaining cash is distributed to the partners. The partners share net income and loss in the ratio of 3:2:1.

Prepare a statement of partnership liquidation for the period July 1-29. Enter any subtractions (balance deficiencies, payments, cash distributions, divisions of loss, sale of assets) as negative numbers using a minus sign. If an amount is zero, enter in "0".

Gold, Porter, and Sims
Statement of Partnership Liquidation
For the Period Ending July 1-29
	Cash +	Noncash Assets =	Liabilities +	Capital Gold (3/6) +	Capital Porter (2/6) +	Capital Sims (1/6)
Balances before realization	$	$	$	$	$	$
Sale of assets and division of loss	+
Balances after realization	$	$	$	$	$	$
Payment of liabilities
Balances after payment of liabilities	$	$	$	$	$	$
Cash distributed to partners
Final balances	$	$	$	$	$	$

Answer 1

Schedule of cash payment

	Cash	Non cash assets	liabilities	Gold, Capital	Porter, Capital	Sims capital
Balance before liquidation	45,900	74,700	33,900	28,500	40,200	18,000
sales of non cash assets and allocation of gain	59,700	- 74,700	0	- 7,500	- 5,000	- 2,500
Balances after realization	105,600	0	33,900	21,000	35,200	15,500
payment of liabilities	- 33,900		- 33,900
Balances after payment of liabilities	71,700	0	0	21,000	35,200	15,500
cash distribution to partners	- 71,700	0	0	- 21,000	- 35,200	- 15,500
final balances	0	0	0	0	0

Sale price of non cash assets = $59,700

Book value of non cash assets = $74,700

Loss on disposal of assets =  Book value of non cash assets - Sale price of non cash assets

= 74,700 - 59,700

= $15,000

Loss to be shared by Gold = 15,000 x 3/6

= $7,500

Loss to be shared by Porter = 15,000 x 2/6

= $5,000

Loss to be shared by Sims = 15,000 x 1/6

= $2,500

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