Bob and Ted are partners. Bob is a 70% partner and Ted is a 30% partner. They have decided to liquidate the partnership. Liquidation expenses are estimated to be $6,000. The partnership balance sheet at the date of liquidation is as follows: Assets: Cash 60,000 Non cash assets 180,000 Total assets 240,000 Liabilities and capital: Liabilities 15,000 Total capital 225,000 Total liabilities and capital 240,000 As of the date of liquidation Bob has 80,000 of capital and Ted has 145,000 of capital . Prepare journal entries for the following transactions: Distributed safe cash payments to the partners Paid the liabilities in full Sold noncash assets for 150,000 Distributed safe cash payments to the partners Paid liquidating expenses totaling 4,000 Made final distributions 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.
Bob and Ted are partners. Bob is a 70% partner and Ted is a 30% partner. They have decided to liquidate the partnership. Liquidation expenses are estimated to be $6,000.
The partnership
Assets:
Cash 60,000
Non cash assets 180,000
Total assets 240,000
Liabilities and capital:
Liabilities 15,000
Total capital 225,000
Total liabilities and capital 240,000
As of the date of liquidation Bob has 80,000 of capital and Ted has 145,000 of capital . Prepare
- Distributed safe cash payments to the partners
- Paid the liabilities in full
- Sold noncash assets for 150,000
- Distributed safe cash payments to the partners
- Paid liquidating expenses totaling 4,000
- Made final distributions to the partners
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