Liquidating Partnerships—Deficiency Prior to liquidating their partnership, Pepper and Morrison had capital accounts of $21,000 and...

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Liquidating Partnerships—Deficiency Prior to liquidating their partnership, Pepper and Morrison had capital accounts of $21,000 and...

Liquidating Partnerships—Deficiency Prior to liquidating their partnership, Pepper and Morrison had capital accounts of $21,000 and $85,000, respectively. The partnership assets were sold for $40,000. The partnership had no liabilities. Pepper and Morrison share income and losses equally.

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Answer 1

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Please find below the answer
Statementshowing Computations
Paticulars	Amount
Assets = Capital + Liabilities
Capital + Liabilities = 21000 + 85000 +0	106,000.00
Sale Value of assets	40,000.00
Loss on Sale of assets = 106000 - 40000	66,000.00
Loss to be shared equally = 66000/2	33,000.00

Particulars	Pepper	Morrison
Capital Accounts	21,000.00	85,000.00
Loss to be shared equally	(33,000.00)	(33,000.00)
Net Capital to be repaid	(12,000.00)	52,000.00

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Answer 2

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