Partners I, J and K share profits and losses equally. On March 31, 2020, the partners voted to liquidate the partnership when its assets, liabilities, and capital were as follows: Cash 77,000 60,500 660,000 Liabilities 440,000 Note receivable from K Loans: Other noncash assets 22,000 88,000 J Capital 82,500 82,500 82,500 797,500 K 797,500 Assume the following: a) All the noncash assets of P660,000 were sold for P297,000 b) K instructed the partnership to write off the P60,500 he borrowed from the partnership c) All partners could eliminate any deficits in their capital accounts through offset or contribution, or both d) All cash was distributed to outside creditors and partners Required: 1. Prepare a Statement of Partnership Liquidation 2. Prepare the joumal entries to record the liquidation of the partnership
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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