Statement of Partnership Liquidation After the accounts are closed on February 3, prior to liquidating the partnership, the capital accounts of William Gerloff, Joshua Chu, and Courtney Jewett are $19,680, $4,960, and $21,840, respectively. Cash and noncash assets total $5,100 and $56,140, respectively. Amounts owed to creditors total $14,760. The partners share income and losses in the ratio of 2:1:1. Between February 3 and February 28, the noncash assets are sold for $32,700, the partner with the capital deficiency pays the deficiency to the partnership, and the liabilities are paid. CHART OF ACCOUNTS Gerloff, Chu, and Jewett General Ledger   ASSETS 110 Cash 111 Petty Cash 112 Accounts Receivable 113 Allowance for Doubtful Accounts 114 Interest Receivable 115 Notes Receivable 116 Inventory 117 Supplies 118 Office Supplies 119 Prepaid Insurance 120 Land 123 Building 124 Accumulated Depreciation-Building 125 Equipment 126 Accumulated Depreciation-Equipment 129 Asset Revaluations 133 Patent   LIABILITIES 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 215 Notes Payable   EQUITY 310 William Gerloff, Capital 311 William Gerloff, Drawing 312 Courtney Jewett, Capital 313 Courtney Jewett, Drawing 314 Joshua Chu, Capital 315 Joshua Chu, Drawing   REVENUE 410 Revenues 610 Interest Revenue EXPENSES 510 Cost of Merchandise Sold 520 Salary Expense 521 Advertising Expense 522 Depreciation Expense-Building 523 Depreciation Expense-Equipment 526 Repairs Expense 529 Selling Expenses 531 Rent Expense 533 Insurance Expense 534 Supplies Expense 535 Office Supplies Expense 536 Credit Card Expense 537 Cash Short and Over 538 Property Tax Expense 539 Miscellaneous Expense 710 Interest Expense Labels   For Period February 3-28   For the Year Ended February 28 Amount Descriptions   Balances after payment of liabilities   Balances after realization   Balances before realization Capital additions   Cash distributed to partners   Final balances Less partner withdrawals   Net income for the year   Payment of liabilities Receipt of deficiency   Sale of assets and division of loss 1. Prepare a statement of partnership liquidation, indicating (a) the sale of assets and division of loss, (b) the payment of liabilities, (c) the receipt of the deficiency (from the appropriate partner), and (d) the distribution of cash. Be sure to complete the statement heading. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers (balance deficiencies, payments, cash distributions, divisions of loss), use a minus sign. If there is no amount to be reported for items (a) - (d), the cell can be left blank. However, in the balance rows, a balance of zero MUST be indicated by entering "0". Gerloff, Chu, and Jewett Statement of Partnership Liquidation   1   Cash + Noncash Assets = Liabilities + Capital, Gerloff (2/4) + Capital, Chu (1/4) + Capital, Jewett (1/4) 2               3               4

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Statement of Partnership Liquidation

After the accounts are closed on February 3, prior to liquidating the partnership, the capital accounts of William Gerloff, Joshua Chu, and Courtney Jewett are $19,680, $4,960, and $21,840, respectively. Cash and noncash assets total $5,100 and $56,140, respectively. Amounts owed to creditors total $14,760. The partners share income and losses in the ratio of 2:1:1. Between February 3 and February 28, the noncash assets are sold for $32,700, the partner with the capital deficiency pays the deficiency to the partnership, and the liabilities are paid.

CHART OF ACCOUNTS
Gerloff, Chu, and Jewett
General Ledger
  ASSETS
110 Cash
111 Petty Cash
112 Accounts Receivable
113 Allowance for Doubtful Accounts
114 Interest Receivable
115 Notes Receivable
116 Inventory
117 Supplies
118 Office Supplies
119 Prepaid Insurance
120 Land
123 Building
124 Accumulated Depreciation-Building
125 Equipment
126 Accumulated Depreciation-Equipment
129 Asset Revaluations
133 Patent
  LIABILITIES
210 Accounts Payable
211 Salaries Payable
213 Sales Tax Payable
214 Interest Payable
215 Notes Payable
  EQUITY
310 William Gerloff, Capital
311 William Gerloff, Drawing
312 Courtney Jewett, Capital
313 Courtney Jewett, Drawing
314 Joshua Chu, Capital
315 Joshua Chu, Drawing
  REVENUE
410 Revenues
610 Interest Revenue
EXPENSES
510 Cost of Merchandise Sold
520 Salary Expense
521 Advertising Expense
522 Depreciation Expense-Building
523 Depreciation Expense-Equipment
526 Repairs Expense
529 Selling Expenses
531 Rent Expense
533 Insurance Expense
534 Supplies Expense
535 Office Supplies Expense
536 Credit Card Expense
537 Cash Short and Over
538 Property Tax Expense
539 Miscellaneous Expense
710 Interest Expense
Labels  
For Period February 3-28  
For the Year Ended February 28
Amount Descriptions  
Balances after payment of liabilities  
Balances after realization  
Balances before realization
Capital additions  
Cash distributed to partners  
Final balances
Less partner withdrawals  
Net income for the year  
Payment of liabilities
Receipt of deficiency  
Sale of assets and division of loss

1. Prepare a statement of partnership liquidation, indicating (a) the sale of assets and division of loss, (b) the payment of liabilities, (c) the receipt of the deficiency (from the appropriate partner), and (d) the distribution of cash. Be sure to complete the statement heading. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers (balance deficiencies, payments, cash distributions, divisions of loss), use a minus sign. If there is no amount to be reported for items (a) - (d), the cell can be left blank. However, in the balance rows, a balance of zero MUST be indicated by entering "0".

Gerloff, Chu, and Jewett
Statement of Partnership Liquidation
 
1
 
Cash +
Noncash Assets =
Liabilities +
Capital, Gerloff (2/4) +
Capital, Chu (1/4) +
Capital, Jewett (1/4)
2
 
 
 
 
 
 
 
3
 
 
 
 
 
 
 
4
 
 
 
 
 
 
 
5
 
 
 
 
 
 
 
6
 
 
 
 
 
 
 
7
 
 
 
 
 
 
 
8
Balances
 
 
 
 
 
 
9
 
 
 
 
 
 
 
10
 
 
 
 
 
 
 

2. Assume that the partner with the capital deficiency declares bankruptcy and is unable to pay the deficiency. Journalize the entries on Feb. 28 to (a) allocate the partner’s deficiency and (b) distribute the remaining cash. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

JOURNAL
ACCOUNTING EQUATION
 
  DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY
1
 
 
 
 
 
 
 
 
2
 
 
 
 
 
 
 
 
3
 
 
 
 
 
 
 
 
4
 
 
 
 
 
 
 
 
5
 
 
 
 
 
 
 
 
6
 
 
 
 
 
 
 
 
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