follows: Cash $ 46,000 Liabilities $ 186,000 Accounts receivable 76,000 Butler, loan 46,000 Office equipment (net) 66,000 Butler, capital (25%) 130,000
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.
The
| Cash | $ | 46,000 | Liabilities | $ | 186,000 | ||
| 76,000 | Butler, loan | 46,000 | |||||
| Office equipment (net) | 66,000 | Butler, capital (25%) | 130,000 | ||||
| Building (net) | 190,000 | Osman, capital (25%) | 46,000 | ||||
| Land | 180,000 | Ward, capital (50%) | 150,000 | ||||
| Total assets | $ | 558,000 | Total liabilities and capital | $ | 558,000 | ||
The following transactions transpire in chronological order during the liquidation of the partnership:
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Collected 90 percent of the accounts receivable and wrote the remainder off as uncollectible.
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Sold the office equipment for $28,000, the building for $142,000, and the land for $184,000.
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Distributed safe payments of cash.
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Paid all liabilities in full.
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Paid actual liquidation expenses of $38,000 only.
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Made final cash distributions to the partners.
Prepare journal entries to record these liquidation transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
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