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| Working Notes: | STATEMENT OF PARTNERSHIP LIQUIDATION | |||||||
| Particulars | Cash | + | Non Cash Assets | = | Laibilites + | Floyd | DeWitt | |
| ('60%) | ('40%) | |||||||
| Balance before realization | $ 20,200 | + | $ 1,06,000 | = | $ 55,800 | $ 46,200 | $ 24,200 | |
| Sale of Non Cash and allocation of Gain | $ 1,18,000 | $ -1,06,000 | $ 7,200 | $ 4,800 | ||||
| ($ 12,000 X 60%) | ($ 12,000 X 40%) | |||||||
| (Gain = $ 118,000 - $ 106,000 = $ 12,000) | ||||||||
| New Balance | $ 1,38,200 | + | $ - | = | $ 55,800 | $ 53,400 | $ 29,000 | |
| Pay Liabilities | $ -55,800 | + | $ - | = | $ -55,800 | $ - | $ - | |
| New Balance | $ 82,400 | + | $ - | = | $ - | $ 53,400 | $ 29,000 | |
| Cash Distributed to Partners | $ -82,400 | + | $ - | = | $ - | $ -53,400 | $ -29,000 | |
| Final Balance | $ - | + | $ - | = | $ - | $ - | $ - | |
| Solution: | ||||||||
| Transaction | Account Title and Explanation | Debit | Credit | |||||
| A | Cash | $ 1,18,000 | ||||||
| Non Cash Assets | $ 1,06,000 | |||||||
| Gain on sale of non cash assets | $ 12,000 | |||||||
| (To Record the sale of Non cash assets) | ||||||||
| B | Gain on sale of Non Cash Assets | $ 12,000 | ||||||
| Floyd's Capital | $ 7,200 | |||||||
| DeWitt's Capital | $ 4,800 | |||||||
| (To Record the distribution of Gain on sale of assets) | ||||||||
| C | Liabilities | $ 55,800 | ||||||
| Cash | $ 55,800 | |||||||
| (To Record the payment of Liability) | ||||||||
| D | Floyd's Capital | $ 53,400 | ||||||
| DeWitt's Capital | $ 29,000 | |||||||
| Cash | $ 82,400 | |||||||
| (To Record the distribution of Cash to Both partner) | ||||||||
|
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