Caruso, Evans, and Weisman are partners in a retail lighting store. They share income and losses in the ratio of 2:2:1, respectively. The partners have agreed to liquidate the partnership. Here is the partnership balance sheet before the liquidation:

The other assets were sold on September 1, 2010, for $720,000. Accounts payables were paid on September 4, 2010. The remaining cash was distributed to the partners on September 11, 2010.

Required
1. Prepare a statement of Liquidation.
2. Prepare the following entries in journal form:
a. The sale of the other assets,
b. Payment of the accounts payable,
c. The distribution of the loss from realization, and
d. The distribution to the partners of the remaining cash.

Transcribed Image Text:

Caruso, Evans, and Welsman Partnershlp Balance Sheet August 31, 2010 AsSETS LIABILITIES Cash Other assets 280,000 Accounts payable$360,000 880,000 PARTNERS' EQUITY Caruso, Capital Evans, Capital Weisman, Capital Total partners' equity Total liabilities and $ 400,000 240,000 160,000 800,000 Total assets 1,,000 partners' equity $1.160,000