Required information [The following information applies to the questions displayed below.] The Field, Brown & Snow are partners and share income and losses equality. The partner decide to liquidate the partnership when their capital balances are as follows: Field, $131,250; Brown, $165,000; and Snow, $153,750. On May 31, the liquidation resulted in a loss of $405,000. 3. Assume that the partner with a deficit does not reimburse the partnership. Prepare journal entries (a) to transfer the deficit to the other partners and (b) to record the final disbursement 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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Required information
[The following information applies to the questions displayed below.]
The Field, Brown & Snow are partners and share income and losses equality. The partner decide to liquidate the
partnership when their capital balances are as follows: Field, $131,250, Brown, $165,000; and Snow, $153,750. On May 31,
the liquidation resulted in a loss of $405,000.
3. Assume that the partner with a deficit does not reimburse the partnership. Prepare journal entries (a) to transfer the deficit to the
other partners and (b) to record the final disbursement of cash to the partners.
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Journal entry worksheet
1
2
Record the transfer of the deficit to the other partner(s).
Note: Enter debits before credits.
Transaction
(a)
Record entry
General Journal
Clear entry
Debit
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Credit
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