After Discontinuing the Ordinary Business Operations and Closing the Accounts

question 143

Essay

After discontinuing the ordinary business operations and closing the accounts on May 7, the ledger of the partnership of Anna, Brian, and Cole indicated the following:​ The partners share net income and losses in the ratio of 3:2:1. Between May 7 and May 30, the noncash assets were sold for $150,000, the liabilities were paid, and the remaining cash was distributed to the partners.​
(a)Prepare a statement of partnership liquidation.
(b)Assume the same facts as in
(a), except that the noncash assets were sold for $45,000 and any partner with a capital deficiency pays the amount of the deficiency to the partnership. Prepare a statement of partnership liquidation.

---

Definitions:

Legal Liability

The state of being legally responsible for something, such as a debt or obligation.

Third Party

An entity or individual who is not directly involved in a transaction or legal matter but may be affected by it.

Offer

A proposal presented by one party to another as a basis for negotiations or forming a contract.

Legal Liability

Refers to being legally responsible for damages or enforcement actions, arising out of one's actions or omissions under the law.