Lee, Min and Ho have been in partnership for more than 10 years. They see that the business profits have declined steadily in the past few years, therefore agree to terminate the partnership before the business experíence any losses. As the accountant of the partnership, Lee presented the following account balances of the partnership to the other partners: Cash 2$ 60,390 Noncash assets 201,980 Liabilities 40,000 Capital Account- Lee 94,550 Capital Account- Min 72,180 Capital Account - Ho 55,640 Liquidation expenses Accountant fees 5,000 2,000 Lee, Min and Ho share profit and loss on a ratio basis of 30:35:35. Instructions: Prepare journal entries for the following transactions: a. Distributed safe cash payments to the partners. b. Paid $40,000 of the partnership's liabilities. c. Sold noncash assets for $156,480. d. Paid all expenses related to the liquidation.
Lee, Min and Ho have been in partnership for more than 10 years. They see that the business profits have declined steadily in the past few years, therefore agree to terminate the partnership before the business experíence any losses. As the accountant of the partnership, Lee presented the following account balances of the partnership to the other partners: Cash 2$ 60,390 Noncash assets 201,980 Liabilities 40,000 Capital Account- Lee 94,550 Capital Account- Min 72,180 Capital Account - Ho 55,640 Liquidation expenses Accountant fees 5,000 2,000 Lee, Min and Ho share profit and loss on a ratio basis of 30:35:35. Instructions: Prepare journal entries for the following transactions: a. Distributed safe cash payments to the partners. b. Paid $40,000 of the partnership's liabilities. c. Sold noncash assets for $156,480. d. Paid all expenses related to the liquidation.
Chapter10: Partnerships: Formation, Operation, And Basis
Section: Chapter Questions
Problem 59P
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Transcribed Image Text:Lee, Min and Ho have been in partnership for more than 10 years. They see that the business profits have declined steadily in the past few years,
therefore agree to terminate the partnership before the business experience any losses.
As the accountant of the partnership, Lee presented the following account balances of the partnership to the other partners:
Cash
$
60,390
Noncash assets
201,980
Liabilities
40,000
Capital Account- Lee
94,550
Capital Account - Min
72,180
Capital Account - Ho
55,640
Liquidation expenses
5,000
Accountant fees
2,000
Lee, Min and Ho share profit and loss on a ratio basis of 30:35:35.
Instructions:
Prepare journal entries for the following transactions:
a. Distributed safe cash payments to the partners.
b. Paid $40,000 of the partnership's liabilities.
c. Sold noncash assets for $156,480.
d. Paid all expenses related to the liquidation.
NOTE: follow the 4 steps to liquidate a partnership, one-by-one.
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