The Partnership of Able, Bower, and Cramer Was Liquidated

question 34

Essay

The partnership of Able, Bower, and Cramer was liquidated. The partners have shared profits and losses in the ratio of 2:4:4. Prior to liquidation, their capital balances were the following*:
* Deficit shown in parentheses
Cash totaled $20,000, with liabilities amounting to $30,000. A review of the individual partners' personal financial status reveals the following:
Required:
Prepare a worksheet to liquidate the partnership.

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Definitions:

Merchandise On Hand

The inventory of goods that a retailer has available for sale at any given time.

Trade Discounts

Reductions from the list price of goods or services provided by a seller to a buyer in a commercial transaction.

Wholesaler

An entity that buys goods in large quantities from manufacturers or distributors and sells them to retailers or other businesses.

Retailer

A business that sells goods to the public in relatively small quantities for use or consumption rather than for resale.