The partnership of A, B, C was liquidated. The partners have shared profits and

Question

The partnership of A, B, C was liquidated. The partners have shared profits and losses in the ratio of 2:4:4 Prior to liquidation, their capital balances were the following:

A: $10,000

B: $ (5,000)

C: $ (15,000)

Cash totaled $20,000, with liabilities equaling $30,000. A review of the individual partners' personal financial status reveals:

A: assets = 5,000; liabilites 20,000

B: assets=6,000; liabilities 4,000

C: assets= 30,000; liabilities= 20,000

Prepare a worksheet to liquidate the partnership.

Explanation / Answer

A           10,000 B           (5,000) C         (15,000) Cash           20,000 Liabilities           30,000 Assets Liabilities Capital balance Ratio Cash distribution Liabilities Total A              5,000          20,000 10000 20%                 4,000         6,000      (7,000) B              6,000            4,000 -5000 40%                 8,000      12,000      (7,000) C           30,000          20,000 -15000 40%                 8,000      12,000      (9,000)

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