EX 12-24 Statement of partnership liquidation

After closing the accounts on July 1, prior to liquidating the partnership, the capital account balances of Jessup, King, and Oliver are $70,000, $43,000, and $22,000, respectively. Cash, noncash assets, and liabilities total $62,000, $108,000, and $35,000, respectively. Between July 1 and July 29, the noncash assets are sold for $90,000, the liabilities are paid, and the remaining cash is distributed to the partners. The partners share net income and loss in the ratio of 3:2:1. Prepare a statement of partnership liquidation for the period July 1–29, 2012.

Answer:

JESSUP, KING, AND OLIVER Statement of Partnership Liquidation For the Period Ending July 1–29, 2012  
Capital   Noncash Jessup King  Oliver Cash + Assets = Liabilities + (3/6) + (2/6) + (1/6)   Balances before realization............. $ 62,000 $108,000 $ 35,000 $ 70,000 $ 43,000 $ 22,000 Sale of assets and division  of loss............................................ + 90,000 –108,000   — – 9,000 – 6,000 – 3,000 Balances after realization................ $152,000 $ 0 $ 35,000 $ 61,000 $ 37,000 $ 19,000 Payment of liabilities........................ – 35,000   — – 35,000   —   —   — Balances after payment of  liabilities........................................ $117,000 $ 0 $ 0 $ 61,000 $ 37,000 $ 19,000 Cash distributed to partners........... –117,000   —   — – 61,000 – 37,000 – 19,000 Final balances.................................. $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 

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