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Statement of Partnership Liquidation After closing the accounts on July 1, prior to liquidating the partnership,...

Statement of Partnership Liquidation

After closing the accounts on July 1, prior to liquidating the partnership, the capital account balances of Gold, Porter, and Sims are $27,600, $39,300, and $17,400, respectively. Cash, noncash assets, and liabilities total $42,900, $72,600, and $31,200, respectively. Between July 1 and July 29, the noncash assets are sold for $58,200, 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 $ $ $ $ $ $

Distribution of Cash Upon Liquidation

Hewitt and Patel are partners, sharing gains and losses equally. They decide to terminate their partnership. Prior to realization, their capital balances are $24,000 and $16,000, respectively. After all noncash assets are sold and all liabilities are paid, there is a cash balance of $30,000.

a. What is the amount of a gain or loss on realization?

Loss $

b. How should the gain or loss be divided between Hewitt and Patel?

Hewitt
Patel

c. How should the cash be divided between Hewitt and Patel? If an amount is zero, enter "0".

Hewitt and Patel
Distribution of Cash
Hewitt Patel
Capital balances before realization $ $
Division of gain or loss on realization
Balances $ $
Cash distributed to partners
Final balances $ $

Solutions

Expert Solution

cash Noncash Assets = Liabilities + Capital Gold (3/6) + Capital Porter (2/6) + Capital Sims (1/6)
Balances before realization 42900 $ 72600 $31200 $27600 $39300 $17400
Sale of assets and division of loss 58200 - 72600 0 -7200 -4800 -2400
Balances after realization 101100 $0 $31200 $20400 $34500 $15000
Payment of liabilities -31200 0 -31200 0 0 0
Balances after payment of liabilities 69900 $0 $0 $20400 $34500 $15000
Cash distributed to partners -69900 0 0 -20400 -34500 -15000
Final balances 0 $0 $0 $0 $0 $0

ekkarill92 answered 1 year ago
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