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In: Accounting

Matthews, Mitchell, and Michaels are partners in BG Land Development Company and share losses in a...

Matthews, Mitchell, and Michaels are partners in BG Land Development Company and share losses in a 5:3:2 ratio, respectively. The balance sheet on June 30, 20x1, when they decide to liquidate the business, is as follows:

Assets                                                                          Liabilities and Capital

Cash               $20,000                                               Accounts Payable                   $30,000

Noncash Assets       150,000                                   Mitchell, Loan                            10,000

                                                                                    Matthews, Capital                     80,000

                                                                                    Mitchell, Capital                        36,000

                                                                                    Michaels, Capital                       14,000

Total Assets           $170,000                       Total Liabilities and Equities             $170,000          

The noncash assets are sold for $110,000.

Required

  1. Prepare a statement of partnership realization and liquidation.
  2. Prepare the required journal entries to account for the liquidation of BG Land Development Company.        

Solutions

Expert Solution

Solution: (a):

Solution: (b):

ekkarill92 answered 1 year ago
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