After discontinuing the ordinary business operations and closing the accounts on May 7, the ledger of the partnership of Anna, Brian, and Cole indicated the following: Cash $ 7,500 Noncash Assets 105,000 Liabilities $ 27,500 Anna, Capital 45,000 Brian, Capital 15,000 Cole, Capital 25,000 $112,500 $112,500 The partners share net income and losses in the ratio of 3:2:1. Between May 7-30, the noncash assets were sold for $150,000, the liabilities were paid, and the remaining cash was distributed to the partners. (a) Prepare a statement of partnership 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.
s After discontinuing the ordinary business operations and closing the accounts on May 7, the ledger
of the
Cash $ 7,500
Noncash Assets 105,000
Liabilities $ 27,500
Anna, Capital 45,000
Brian, Capital 15,000
Cole, Capital 25,000
$112,500 $112,500
The partners share net income and losses in the ratio of 3:2:1. Between May 7-30, the noncash assets were
sold for $150,000, the liabilities were paid, and the remaining cash was distributed to the partners.
(a) Prepare a statement of partnership liquidation.
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