1. The total loss from the liquidation of the partnership 2. Prepare the statement of liquidation. 3. Journal entries to record the liquidation.
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
|
C. |
The partnership accounts of Guess, Jag and Levis are shown below as of December 31, 2019. |
||||
|
|
|
||||
|
|
|
Guess, Drawing (debit balance) |
P (32,000) |
|
|
|
|
|
Levis, Drawing (debit balance) |
(12,000) |
|
|
|
|
|
Jag, Loan |
40,000 |
|
|
|
|
|
Guess, Capital |
164,000 |
|
|
|
|
|
Jag, Capital |
134,000 |
|
|
|
|
|
Levis, Capital |
144,000 |
|
|
Total assets amounted to P 638,000, including cash of P 70,000, and P 200,000 worth of liabilities. On January 2019, the partnership was liquidated, and Jag received P 111,000 cash as final settlement.
Required:
|
1. |
The total loss from the liquidation of the partnership |
|
2. |
Prepare the statement of liquidation. |
|
3. |
|
Step by step
Solved in 4 steps
