A, B and C are partners sharing profits and losses in the ratio of 60%,30%...
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Accounting
A, B and C are partners sharing profits and losses in the ratio of 60%,30% and 10%. They decided to liquidate their business. The balance Sheet on the date of liquidation was as follows:
Cash 20,000
Receivables 40,000
Other current assets 20,000
Machinery 80,000
Equipments 50,000
Land and building 300,000
Liabilities 150,000
Capital Account balances:
A 200,000
B 124,000
C 36,000
C had become insolvent and was unable to pay towards any of his partnership debts.
The assets and liabilities were realized as follows:
a. Receivables paid only 50% of their dues.
b. Other current assets were sold for $15,000
c. Machinery and equipments were sold at their market values of $30,000 and $20,000 respectively.
d. Land was sold at the book value of $70,000 but Building yielded 40% of the book values.
e. All liabilities were paid off. Solvent partners paid their debit capital balances if any, in cash.
f. The liquidation expenses amounted to $12,000
Reqd.
1. Show the statement of liquidation for the partnership.
2. Show necessary journal entries to record the liquidation of the business
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