2. The partnership of Douglas Krismerry and Frank has the following trial balance on December 31 2013: Debit Credit Cash 25000 Accounts Receivable (net) 35000 Inventory 40000 Plant and Equipment (net) 220000 Accounts Payable 45000 Douglas Capital 125000 Krismerry Capital l95000 Frank Capital l55000 320000 320000 The partners share profits and losses as follows: Douglas 50 percent; Krismerry 30 percent; and Frank 20 percent. The partners have decided to liquidate their partnership by installments. Cash is distributed to the partners at the end of each month. A summary of the liquidation transactions follows: Januarya. $30000 is collected on accounts receivable; balance is uncollectible.b. $25000 received for the entire inventory.c. $1500 liquidation expense paid.d. $45000 paid to creditors.e. $10000 cash retained in the business at the end of the month.Februaryf. $2000 in liquidation expenses paid.g. As part payment of his capital Frank accepted an item of special equipment that he developed which had a book value of $10000. The partners agreed that a value of $14000 should be placed on this item for liquidation purposes.h. $5000 cash retained in the business at the end of the month.Marchi. $155000 received on sale of remaining plant and equipment.j. $1000 liquidation expenses paid. No cash retained in the business.Required:Prepare a statement of partnership realization and liquidation with supporting schedules of safe payments to partners.

Categories: Uncategorized


Leave a Reply

Your email address will not be published. Required fields are marked *