Abby Anna and Anita are partners in a tanning salon
Abby, Anna, and Anita are partners in a tanning salon. The assets, liabilities, and capital balances as of July 1, 2014, follow.
Assets ............ $960,000
Liabilities .......... 320,000
Abby, Capital ......... 280,000
Anna, Capital ......... 80,000
Anita, Capital ......... 280,000
Because competition is strong, business is declining, and the partnership has no cash, the partners have decided to sell the business. Abby, Anna, and Anita share income and losses in a ratio of 3:1:1, respectively. The assets were sold for $520,000, and the liabilities were paid. Anna has no other assets and will not be able to cover any deficits in her Capital account. Prepare a statement of liquidation to show how the ending cash balance will be distributed to the partners.

Membership TRY NOW
  • Access to 800,000+ Textbook Solutions
  • Ask any question from 24/7 available
  • Live Video Consultation with Tutors
  • 50,000+ Answers by Tutors
Relevant Tutors available to help