After several years of operations, the partnership of Arenas, Dulay and Laurente is to be liquidated. After making the closing entries on June 30, 2019, the following accounts remained open: Account Balance Account Title Debit Credit Cash P 50,000 2,350,000 Non-cash Assets Liabilities Arenas, Capital Dulay, Capital Laurente, Capital P400,000 900,000 500,000 600,000 The non-cash assets are sold for P2,650,000. Profits and losses are shared equally. Required: Prepare a statement of partnership liquidation and the entries to record the following: 1. Sale of all non-cash assets. 2. Distribution of gain on realization to the partners. 3. Payment of the liabilities. 4. Distribution of cash to the partners.
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.
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