Adams, Peters, and Blake share profits and losses for their APB Partnership in a ratio of 2:3:5.
Question:
Adams, Peters, and Blake share profits and losses for their APB Partnership in a ratio of 2:3:5. When they decide to liquidate, the balance sheet is as follows:
Assets Liabilities and Capital Cash $ 54,000 Liabilities $ 46,200 Adams, Loan 12,800 Adams, Capital 70,400 Other Assets 228,000 Peters, Capital 96,000 Blake, Capital 82,200 Total Assets $ 294,800 Total Liabilities and Equities $ 294,800 Liquidation expenses are expected to be negligible. No interest accrues on loans with partners after termination of the business. During the liquidation process for the APB Partnership, the following events occurred:
During the first month of liquidation, noncash assets with a book value of $92,000 were sold for $70,500, and $25,000 of the liabilities were paid. During the second month, the remaining noncash assets were sold for $77,000. The loan receivable from Adams was collected, and the rest of the creditors were paid. Cash is distributed to partners at the end of each month. Required:
Required:
Prepare a statement of partnership realization and liquidation with a schedule of safe payments to partners for the liquidation period. Please follow the practical guidelines when completing this worksheet.