Loose Leaf for Fundamentals of Accounting Principles and Connect Access Card
Loose Leaf for Fundamentals of Accounting Principles and Connect Access Card
22nd Edition
ISBN: 9781259542169
Author: John J Wild
Publisher: McGraw-Hill Education
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Chapter 12, Problem 10DQ
To determine

Concept Introduction:

Liquidation of Partnership: Liquidation of partnership is the process of selling all the partnership assets and distributing the collection amongst the partners. The liquidation of partnership takes following steps from the point for view of accounting:

  1. Sale of non cash assets and realization of cash.
  2. Sharing the gain or loss on sale of non cash assets amongst the partners in their income sharing ratio.
  3. Disbursement of liabilities of partnership using the available cash.
  4. Distribution of balances cash amongst the partners in their capital ratio.

To discuss: The treatment of deficiency of partner’s capital at the time of liquidation

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