After the accounts are closed on February 3, 2014, prior to liquidating the partnership, the capital accounts
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Question:
Amounts owed to creditors total $15,000. The partners share income and losses in the ratio of 2:1:1. Between February 3 and February 28, the noncash assets are sold for $34,300, the partner with the capital deficiency pays the deficiency to the partnership, and the liabilities are paid.
Instructions
1. Prepare a statement of partnership liquidation, indicating
(a) The sale of assets and division of loss,
(b) The payment of liabilities,
(c) The receipt of the deficiency (from the appropriate partner),
(d) The distribution of cash.
2. Assume the partner with the capital deficiency declares bankruptcy and is unable to pay the deficiency. Journalize the entries to
(a) Allocate the partner's deficiency
(b) Distribute the remaining cash.
Related Book For
Horngrens Financial and Managerial Accounting
ISBN: 978-0133866292
5th edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura
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