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Adv1 bb16
Adv1 bb16
160,000
(144,000)
16,000
(4,000)
12,000
(12,000)
-
20%
Roth
capital
141,600
(80,000)
61,600
(4,000)
57,600
ILLUSTRATION OF INSTALLMENT LIQUIDATION
January 20x2- the loan to Roth is offset against his capital balance, the goodwill is
written off, $200,000 is collected on account, inventory items that cost $160,000 are
sold for $200,000, and cash is distributed
February 20x2-Equipment with a book value of $80,000 is sold for $60,000, the
remaining inventory items are sold for $180,000, liquidation expenses of $4,000 are
paid, a liability of $8,000 is discovered, and cash is distributed.
March 20x2-the land is sold for $150,000, liquidation expenses of $5,000 are paid,
and cash is distributed.
April 20x2-Additional equipment is sold for $150,000, the remaining equipment and
receivables are written off, and all cash on hand is distributed in final liquidation of the
partnership