After 25 years of operations, the Banana, Orange, and Pear partnership has decided to liquidate. At that time, 1/1/20x2, the partnership balance sheet is as follows: Banana, Orange, and Pear Partners Balance Sheet as of 12/31/20x1 Assets Liabilities and Partners’ Capital Cash $80,000 Liabilities $47,000 Noncash assets 205,000 Banana, Capital 138,000 Orange, Capital 119,500 Pear, Capital (19,500) Total assets $285,000 Total Liabilities and Capital $285,000 In accordance with the Articles of Partnership, the partners agreed to share profits and losses as follows: Banana, Capital 30% Orange, Capital 40% Pear, Capital 30% The partnership estimates liquidation expenses of $10,000. Required: Assuming maximum losses, prepare a formal Statement of Liquidation for the partnership.
After 25 years of operations, the Banana, Orange, and Pear
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Banana, Orange, and Pear Partners |
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|
Balance Sheet |
|||
|
as of 12/31/20x1 |
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|
Assets |
Liabilities and Partners’ Capital |
||
|
Cash |
$80,000 |
Liabilities |
$47,000 |
|
Noncash assets |
205,000 |
Banana, Capital |
138,000 |
|
|
Orange, Capital |
119,500 |
|
|
|
|
Pear, Capital |
(19,500) |
|
Total assets |
$285,000 |
Total Liabilities and Capital |
$285,000 |
In accordance with the Articles of Partnership, the partners agreed to share
|
Banana, Capital |
30% |
|
Orange, Capital |
40% |
|
Pear, Capital |
30% |
The partnership estimates liquidation expenses of $10,000.
Required:
- Assuming maximum losses, prepare a formal Statement of Liquidation for the partnership.
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