After closing the accounts on July 1, prior to liquidating the partnership, the capital account balances of Gold, Porter, and Sims are $55,000

After closing the accounts on July 1, prior to liquidating the partnership, the capital account balances of Gold, Porter, and Sims are $55,000, $45,000, and $20,000, respectively. Cash, noncash assets, and liabilities total $56,000, $96,000, and $32,000, respectively. Between July 1 and July 29, the noncash assets are sold for $90,000, the liabilities are paid, and the remaining cash is distributed to the partners. The partners share net income and loss in the ratio of 3:2:1. Prepare a statement of partnership liquidation for the period July 1–29, 2014.


Answer:












GOLD, PORTER, AND SIMS
Statement of Partnership Liquidation
For the Period Ending July 1–29, 2014
Noncash Gold Porter Sims
Cash + Assets = Liabilities + (3/6) + (2/6) + (1/6)
Balances before realization $ 56,000 $ 96,000 $ 32,000 $55,000 $45,000 $20,000
Sale of assets and division of loss +90,000 –96,000 — –3,000 –2,000 –1,000
Balances after realization $146,000 $ 0 $ 32,000 $52,000 $43,000 $19,000
Payment of liabilities –32,000 — –32,000 — — —
Balances after payment of liabilities $114,000 $ 0 $ 0 $52,000 $43,000 $19,000
Cash distributed to partners –114,000 — — –52,000 –43,000 –19,000
Final balances $ 0 $ 0 $ 0 $ 0 $ 0 $ 0