Question

(a)   The partnership of Hanly, Ide, and Jen was dissolved. By August 1, 2006, all assets had been converted into cash and all partnership liabilities were paid. The partnership balance sheet on August 1, 2006 (with partner residual profit and loss sharing percentages) was as follows:

Cash   $   50,000       Hanly, capital(30%)   $   4,000
               Ide, capital(20%)       (60,000)
               Jen, capital(50%)       106,000
Total assets   $   50,000       Total equity   $   50,000

The value of partners' personal assets and liabilities on August 1, 2006 were as follows:
       Hanly       Ide       Jen
Personal assets   $   74,000   $   120,000   $   56,000
Personal liabilities       72,000       80,000       60,000
                      
(a)   Required:

Prepare the final statement of partnership liquidation.

Answer 1

	Cash	Hanly Capital	Ide Capital	Jen Capital	Total
Balance Aug 1	50,000	4,000	(60,000)	106,000	50,000
Ide's Personal contribution 40,000	40,000	-	40,000
	90,000	4,000	(20,000)	106,000	90,000
Write-off Ide 20,000	-	(7,500)	20,000	(12,500)
	90,000	(3,500)	-	93,500	90,000
Hanly's Personal contribution 2,000	2,000	2,000	-	-
	92,000	(1,500)	-	93,500	92,000
Write-off Hanly 1,500	-	1,500		(1,500)
	92,000	-	-	92,000	92,000
Distribute cash	(92,000)			(92,000)
	-	-	-	-	-