Question

Problem 2 (30 points) Mary, Jack and Thomas, who share in income and losses in the ratio of 2:35, decided to discontinue operations as of November 30, the following trial balance was prepared: Mary, Jack and Thomas Post-Closing Trial Balance November 30 Debit Balances Credit Balances 2,950 54,950 Cash Noncash Assets Liabilities Mary, Capital Jack, Capital Thomas, Capital 13,400 7,300 13,950 23,250 57,900 57,900 Between December 1 and December 18, the noncash assets were sold for $27,400 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 entire 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 (e) the distribution of cash to the partners.

Answer 1

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Naming convention and is not available, can be slightly different: Solution: 2 1) Particulars Jack Thomas $ 2,950 $ 54,950 $ 13,400$ 7,300 $ 13,950 $ 23,250 27,400 $-54,950 $- $5,510 $ -8,265 $-13,775 $30,350 $- 13,400 $ 1,790 $ 5,685 $ 9,475 Cash Non Cash Liabilities Mar Beginning Balance Sale of Non Cash Assets Updated Balance Less: Liabilities paid Updated Balance Less: Distribtution of cash Closing Balance $-13,400 $- $-13,400 $ $-16,950s 16,950 $-$- $ 1,790 $ 5,685 $ 9,475 $-1,790 $-5,685 $ -9,475

Naming convention is not available, can be slightly different: Ignore the Explanation in blue for input: ournal Entries 2) Credit Account title and explaination Cash Loss on Sale of Non-cash Assets Non-Cash Asset To record the sale of non-cash assets) Mary, capital Jack, capital Thomas, Capital Loss on Sale of Non-cash Assets To record the division on loss) Liabilities Cash To record the payment of liabilities) No Entry (Because, there is no deficiency) No Entry Debit $27,400 $ 27,550 Trans $ 54,950 (27550/10*2) (27550/10*3) (27550/10*5) $ 5,510 $8,265 13,775 b) $27,550 $13,400 13,400 d) Mary, capital Jack, capital Thomas, Capital Cash To record the final cash payment to partners) e) 1,790 $ 5,685 $ 9,475 $16,950