Refer to the facts in Problem 16-15. The partners have decided to liquidate their partnership by installments

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Refer to the facts in Problem 16-15. The partners have decided to liquidate their partnership by installments instead of accepting the $100,000 offer. Cash is distributed to the partners at the end of each month. A summary of the liquidation transactions follows:
July
1. Collected $16,500 on accounts receivable; balance is uncollectible.
2. Received $10,000 for the entire inventory.
3. Paid $1,000 liquidation expense.
4. Paid $17,000 to creditors.
5. Retained $8,000 cash in the business at the end of the month.
August
6. Paid $1,500 in liquidation expenses.
7. As part payment of his capital, Torves accepted an item of special equipment that he developed, which had a book value of $4,000. The partners agreed that a value of $10,000 should be placed on this item for liquidation purposes.
8. Retained $2,500 cash in the business at the end of the month.
September
9. Received $75,000 on sale of remaining plant and equipment.
10. Paid $1,000 liquidation expenses, retaining no cash in the business.
In Problem 16-15

Refer to the facts in Problem 16-15. The partners have


Required
Prepare a statement of partnership realization and liquidation with supporting schedules of safe payments topartners.

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...
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Advanced Financial Accounting

ISBN: 978-0078025624

10th edition

Authors: Theodore E. Christensen, David M. Cottrell, Richard E. Baker

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