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Question
After discontinuing the ordinary business operations and closing the accounts on May 7, the ledger of the partnership of Anna, Brian, and Cole indicated the following:
| Cash | $ 7,500 | |
| Noncash Assets | 105,000 | |
| Liabilities | $ 27,500 | |
| Anna, Capital | 45,000 | |
| Brian, Capital | 15,000 | |
| Cole, Capital | 25,000 | |
| $112,500 | $112,500 |
The partners share net income and losses in the ratio of 3:2:1. Between May 7 and May 30, the noncash assets were sold for $150,000, the liabilities were paid, and the remaining cash was distributed to the partners.
a. Prepare a statement of partnership liquidation.
b. Assume the same facts as in (a), except that the noncash assets were sold for $45,000 and any partner with a capital deficiency pays the amount of the deficiency to the partnership. Prepare a statement of partnership liquidation.
Answer
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