Scribd
Upload
86 views

Acstran - Assignment 1.3

The partners decided to liquidate the partnership effective January 1, 2020. Non-cash assets were sold for $28,125 with liquidation expenses of $1,875. This resulted in a total loss of $86,250 to be allocated to the partners based on their profit sharing ratios of 50%, 30%, and 20%. After adjustments for Linda's loan payable and deficiency amount, the amounts to be received by the partners were $1,250 for Jackie, $3,750 for Karla, and $0 for Linda.

Uploaded by

Tricia Nicole Dimaano
Copyright
© © All Rights Reserved
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
86 views

Acstran - Assignment 1.3

The partners decided to liquidate the partnership effective January 1, 2020. Non-cash assets were sold for $28,125 with liquidation expenses of $1,875. This resulted in a total loss of $86,250 to be allocated to the partners based on their profit sharing ratios of 50%, 30%, and 20%. After adjustments for Linda's loan payable and deficiency amount, the amounts to be received by the partners were $1,250 for Jackie, $3,750 for Karla, and $0 for Linda.

Uploaded by

Tricia Nicole Dimaano
Copyright
© © All Rights Reserved
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
You are on page 1/ 2

Assignment 1.

3: Statement of Liquidation

Jackie, Karla and Linda are partners with profit and loss ratio of 50%, 30%, and 20%,
respectively. The partners decided to liquidate the partnership effective January 1, 2020. The
partnership trial balances on December 31, 2019 were as follows:

                                                                                   Debit
   Credit
Cash 12,500.00
Non-cash assets 112,500.00
Liabilities to Creditors 33,750.00
Loan payable – Linda 3,750.00
Jackie, Capital 45,000.00
Karla, Capital 30,000.00
Linda, Capital 12,500.00
Totals 125,000.00 125,000.00

The non-cash assets are sold for P28,125 and liquidation expenses of P1,875 are paid. Linda is
insolvent and is unable to repay the partnership for the debit balance.

Required: Prepare a statement of liquidation. 

Statement of Liquidation
1-Jan-20

ASSETS = LIABILITIES + EQUITY


Non-Cash Liabilities to Loan Payable-
Cash Assets Creditors Linda
Balances before Liquidation 12,500.00 112,500.00 33,750.00 3,750.00
Conversion of non-cash assets
& distribution of loss 26,250.00 (112,500.00)
Total 38,750.00 - 33,750.00 3,750.00
Payments to outside creditors (33,750.00) (33,750.00)
Total 5,000.00 - - 3,750.00
Payments to inside creditors (3,750.00)
Total 5,000.00 - - -
Share on Linda's Deficit
Available cash for distribution 5,000.00 - - -
Payment to partners (5,000.00)
Balance, January 1, 2020 - - - -
ANSWER:
Non-cash assets sold 28,125.00
Liquidation expenses (1,875.00)
Net cash proceeds 26,250.00
Carrying amount of non-cash assets (112,500.00)
Total loss (86,250.00)

Jackie (50%) Karla (30%) Linda (20%)


Capital balances 45,000.00 30,000.00 12,500.00
Loan payable - Linda 3,750.00
Total 45,000.00 30,000.00 16,250.00
Allocation of loss (43,125.00) (25,875.00) (17,250.00)
Total 1,875.00 4,125.00 (1,000.00)
Allocation of Linda's deficiency (625.00) (375.00) 1,000.00
Amounts received by the partners 1,250.00 3,750.00 -

LIABILITIES + EQUITY
Jackie,
Capital Karla, Capital Linda, Capital
45,000.00 30,000.00 12,500.00

(43,125.00) (25,875.00) (17,250.00)


1,875.00 4,125.00 (4,750.00)

1,875.00 4,125.00 (4,750.00)


3,750.00
1,875.00 4,125.00 (1,000.00)
(625.00) (375.00) 1,000.00
1,250.00 3,750.00 -
(1,250.00) (3,750.00)
- - -

You might also like