Ryan, Shaw, and Todd, who share in income and losses in the ratio of 4:2:4, decided to discontinue operations as April 30 and liquidate their partnership. After the accounts were closed on April 30, the following trial balance was prepared: Cash 8,100 Noncash Assets 70,600 Liabilities 27500 Ryan, Capital 23,300 Shaw, Capital 12,100 Todd Capital 15,800 Total 78,700 78,700 Between May 1 and May 18, the noncash assets were sold for $20,600, and the liabilities were paid. Instructions 1. Assuming that the partner with the capital deficiency pays the entire amount owed to the partnership, prepare a statement of partnership liquidation. 2. Journalize the entries to record (a) the sale of the assets, (b) the division of loss on the sale of the assets, (c) the payment of the liabilities, (d) the receipt of the deficiency, and the distribution of cash to the partners.
Ryan, Shaw, and Todd, who share in income and losses in the ratio of 4:2:4, decided to discontinue operations as April 30 and liquidate their partnership. After the accounts were closed on April 30, the following trial balance was prepared: Cash 8,100 Noncash Assets 70,600 Liabilities 27500 Ryan, Capital 23,300 Shaw, Capital 12,100 Todd Capital 15,800 Total 78,700 78,700 Between May 1 and May 18, the noncash assets were sold for $20,600, and the liabilities were paid. Instructions 1. Assuming that the partner with the capital deficiency pays the entire amount owed to the partnership, prepare a statement of partnership liquidation. 2. Journalize the entries to record (a) the sale of the assets, (b) the division of loss on the sale of the assets, (c) the payment of the liabilities, (d) the receipt of the deficiency, and the distribution of cash to the partners.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Ryan, Shaw, and Todd, who share in income and losses in the ratio of 4:2:4, decided to discontinue operations as April 30 and liquidate their partnership. After the accounts were closed on April 30, the following
| Cash | 8,100 | |
| Noncash Assets | 70,600 | |
| Liabilities | 27500 | |
| Ryan, Capital | 23,300 | |
| Shaw, Capital | 12,100 | |
| Todd Capital | 15,800 | |
| Total | 78,700 | 78,700 |
Between May 1 and May 18, the noncash assets were sold for $20,600, and
the liabilities were paid.
Instructions
1. Assuming that the partner with the capital deficiency pays the entire amount owed to the partnership, prepare a statement of partnership liquidation.
2.
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