The balance sheet of the Rose Partnership as of July 31, 2011, follows. The partners-Gerri, Susi, and
Question:
The balance sheet of the Rose Partnership as of July 31, 2011, follows.
The partners-Gerri, Susi, and Mari-Share income and losses in the ratio of 5:3:2. Because of a mutual disagreement, Gerri, Susi, and Mari have decided to liquidate the business.
Assume that Gerri cannot contribute any additional personal assets to the company during liquidation and that the following transactions occurred during liquidation:
(a) Accounts receivable were sold for 60 percent of their book value.
(b) Inventory was sold for $276,000.
(c) Equipment was sold for $300,000
(d) Accounts payable were paid in full.
(e) Gain or loss from realization was distributed to the partners' Capital accounts.
(f) Gerri's deficit was transferred to the remaining partners in their new income and loss ratio,
(g) The remaining cash was distributed to Susi and Mari.
Required
1. Prepare a statement of liquation.
2. Prepare entries in Journal form to liquidate the partnership and distribute any remainingcash.
Liquidation in finance and economics is the process of bringing a business to an end and distributing its assets to claimants. It is an event that usually occurs when a company is insolvent, meaning it cannot pay its obligations when they are due.... Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...
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