Question

P12-6A 50. 339 1770 Liquidation 3, inventory sold for $320,000; capital deficiencies paid into partnership Kendra Cogley Mei Gain on Cash Inventory I A/P Capital Capital Capital Liquidation Beginning $ 180,800 $ 537,200 $ 245,500 $ 93,000 $ 212,500 $ 167,000 balances Sale of 600,000 (537,200) 62,800 equipment 780,800 245,500 93,000 212,500 167,000 62,800 Gain/LOSS 31,400 20,724 10,676 (62,800) allocation 780,800 245,500 124,400 233,224 177,676 Totals Capital deficit(s) Totals Payment of liabilities at BV Totals (245,500) (245,500) 535,300 535,300 (535,300) $ 124,400 124,400 (124,400) 233,224 $ 233,224 (233,224) 177,676 $ 177,676 (177,676) Cash distributed O; capital de ficaram cogley Capital Sofio 339 1790 Liquidation 4, inventory sold for $250,000; capital deficiencies from business assets Kendra Cogley Mei Cash Inventory A/P Capital Capital Capital Beginning $ 180,800 $ 537,200 $ 245,500 $ 93,000 $ 212,500 $ 167,000 balances Sale of 500,000 equipment Gain/Loss allocation Totals Capital deficit(s) Payment of liabilities at BV Totals Cash distributed

I think I'm doing these wrong. Please help with liquidation 3 and 4. How would I do journal entries for liquidation 4?

Answer 1

Liquidation - 3 :

Particulars	Cash	Inventory	Accts. Payable	Kendra Capital	Cogley Capital	Mei Capital	Loss on liquidation
Beginning Balances	$ 180,800	$ 537,200	$ 245,500	$93,000	$212,500	$167,000
Sale of Inventory	$ 320,000	$320,000
Loss on Sale of Inventory		$217,200		($108,600)	($71,676)	($36,924)	($217,200)
Total	$500,800	-	$245,500	($15,600)	$140,824	$130,076
Liability Discharged	($245,500)		($245,500)
Total	$ 255,300		-	($15,600)	$140,824	$130,076
Cash Distributed	$255,300			($15,600)	$140,824	$130,076

Liquidation - 4 :

Particulars	Cash	Inventory	Accts. Payable	Kendra Capital	Cogley Capital	Mei Capital	Loss on liquidation
Beginning Balances	$ 180,800	$ 537,200	$ 245,500	$93,000	$212,500	$167,000
Sale of Inventory	$ 250,000	$250,000
Loss on Sale of Inventory		$287,200		($143,600)	($94,776)	($48,824)	($287,200)
Total	$430,800	-	$245,500	($50,600)	$117,724	$118,176
Liability Discharged	($245,500)		($245,500)
Total	$ 185,300		-	($50,600)	$117,724	$118,176
Cash Distributed	$185,300			($50,600)	$117,724	$118,176

Journal Entries For Liquidation - 4:

Sl.No.	Journal Entry	Debit	Credit
a.	For Sale of Inventory
	Cash A/c Dr	$250,000
	To Inventory A/c		$250,000
b.	For liability Discharged
	Accts. Payable A/c Dr	$245,500
	To Cash A/c		$245,500
c.	For Transfer of loss on sale of inventory
	Kendra Capital A/c Dr	$ 143,600
	Cogley Capital A/c Dr	$ 94,776
	Mei Capital A/c Dr	$ 48,824
	To Loss on Liquidation A/c		$ 287,200
d.	For cash distributed to partners and cash received for deficits
	Cogley Capital A/c Dr	$ 117,724
	Mei Capital A/c Dr	$ 118,176
	To Kendra Capital A/c		$ 50,600
	To Cash A/c		$ 185,300