E 17-7 Statement of partnership liquidation The partnership of Ali, Bev, and Cal became insolvent during 2016, and the partnership ledger shows the following balances after all partnership assets have been converted into cash and all available cash distributed: Debit Credit Accounts payable $ 30,000 Ali capital 20,000 Bev capital $120,000 Cal capital 70,000 $120,000 $120,000 Profit- and loss-sharing percentages for the three partners are Ali, 30 percent; Bev, 40 percent; and Cal, 30 percent. The personal assets and liabilities of the partners are as follows: Ali Bev Cal Personal assets $60,000 $110,000 $60,000 Personal liabilities 50,000 60,000 40,000 Required Prepare a schedule to show the phaseout of the partnership and final closing of the books if the partnership creditors recover $30,000 from Bev.
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.
E 17-7 Statement of partnership liquidation
The partnership of Ali, Bev, and Cal became insolvent during 2016, and the partnership ledger shows the following balances after all partnership assets have been converted into cash and all available cash distributed:
|
|
Debit |
Credit |
|---|---|---|
|
Accounts payable |
|
$ 30,000 |
|
Ali capital |
|
20,000 |
|
Bev capital |
$120,000 |
|
|
Cal capital |
|
70,000 |
|
|
$120,000 |
$120,000 |
Profit- and loss-sharing percentages for the three partners are Ali, 30 percent; Bev, 40 percent; and Cal, 30 percent. The personal assets and liabilities of the partners are as follows:
|
|
Ali |
Bev |
Cal |
|---|---|---|---|
|
Personal assets |
$60,000 |
$110,000 |
$60,000 |
|
Personal liabilities |
50,000 |
60,000 |
40,000 |
Required
Prepare a schedule to show the phaseout of the partnership and final closing of the books if the partnership creditors recover $30,000 from Bev.
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