Schedule of Safe Payments to Partners
Partners Maness and Joiner have decided to liquidate their business. The ledger shows the following account balances:
Cash | $ 25,000 | Accounts Payable | $15,000 |
Inventory | 120,000 | Maness, Capital | 65,000 |
|
| Joiner, Capital | 65,000 |
Maness and Joiner share profits and losses in an 8:2 ratio. During the first month of liquidation, half the inventory is sold for $40,000, and $10,000 of the accounts payable is paid. During the second month, the rest of the inventory is sold for $30,000, and the remaining accounts payable are paid. Cash is distributed at the end of each month, and the liquidation is completed at the end of the second month.
Required
Prepare a statement of partnership realization and liquidation with a schedule of safe payments for the two-month liquidation period.
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