Chapter 12, Problem 11DQ

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 Cash balance remaining after the payment of liabilities in case of liquidation