The partnership of Sanchez, Jones, and Williams is to be liquidated as of July 31 of this year. The partners share profits and losses in the ratio of 2: 2: 1, respectively. The firm’s post-closing trial balance looks like this:

The firm’s realization and liquidation transactions are as follows:
July 31 The merchandise inventory sold for $ 78,525; the other assets sold for $ 54,815.
31 The accountant allocated the loss or gain from realization to the partners’ Capital accounts according to the profit and loss ratio.
31 The firm paid its creditors in full.
31 The firm distributed the remaining cash to the partners in accordance with the balances in their Capital accounts.

1. Record the balances in the selected ledger accounts (Cash Acct. No. 111; R. L. Sanchez, Capital, Acct. No. 311; T. J. Jones, Capital, Acct. No. 313; R. O. Williams, Capital, Acct. No. 315; Loss or Gain from Realization, Acct. No. 594).
2. Record the liquidating transactions in general journal form ( page 92).
3. Post the entries to the ledgeraccounts.

  • CreatedOctober 21, 2014
  • Files Included
Post your question