Rob Davis, Stewart Vintu, and Vern Wison are liquidating their partner ship. Before selling the assets and paying the liabilities, the capital balances are Davis $40,000; Vintu, $24,000; and Wilson, $16,000. The profit-and-loss-sharing ratio has been 1:1-2 for Davis, Vintu, and Wilson, respectively. The partnership has $64,000 cash, $38,000 non-cash assets, and $22,000 accounts payable.
Requirements. Assuming the partnership sells the non-cash assets for $46,000, record the journal entries:
a. for the sale of non-cash assets,
b. allocation of gain or loss on liquidation,
c. the payment of the outstanding liabilities,
d. the distribution of remaining cash to partners.
Requirements. Assuming the partnership sells the non-cash assets for $46,000, record the journal entries:
a. for the sale of non-cash assets,
b. allocation of gain or loss on liquidation,
c. the payment of the outstanding liabilities,
d. the distribution of remaining cash to partners.