Brazier, Moore, and Jonah are partners of Bright Sales LLP, sharing income and losses in a ratio
Question:
Brazier, Moore, and Jonah are partners of Bright Sales LLP, sharing income and losses in a ratio of 2:2:1, respectively. The partners decide to liquidate the partnership. The capital account balances prior to liquidation and the sale of assets, on May 1, 2015, are as follows:
Brazier ......................................$15,000
Moore...................................... 35,000
Jonah ....................................... 22,000
Total ........................................$72,000
In winding up operations during the month of May, accounts receivable with a carrying value of $94,000 are sold for $90,000, and liabilities of $30,000 are satisfied. Prior to liquidation, the LLP has a cash balance of $8,000.
a. Prepare a statement of partnership liquidation.
b. Provide the journal entry for the final cash distribution to partners.
Accounts ReceivableAccounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most... Liquidation
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...
Step by Step Answer:
a BRIGHT SALES LLP Statement of Partnership Liquidation For the P...View the full answer
Accounting Volume 2
ISBN: 978-0176509743
2nd Canadian edition
Authors: James Reeve, Jonathan Duchac, Sheila Elworthy, Carl S. Warren
