….. Exam Ch.13 …..


Ex 1
P,T and Z have operated a Laundromat for 10 years. The partners, who
share profit 4:3:3 respectively decide to liquidate the partnership. The firm’s
balance sheet just before the partners sell the other assets for $ 30000 is as
follows:

Assets liabilities and Equity

Cash 15000 Account payable 42000
Other assets 110000 P, capital 55000
T, capital 14000
Z, capital 14000
Total $ 125000 Total $ 125000

The personal status of each partner just before liquidation is as follow:

Partne Personal assets Personal liabilities
r
P 55000 80000
T 30000 10000
Z 30000 50000

1- Prepare statement of realization and liquidation.

2- Prepare Journal entries to record partnership liquidation.

Solve
1-
Cash Other Liab. P T Z
assets 4 3 3
Balance before realization 15000 110000 42000 55000 14000 14000
Realization other assets 30000 (110000) (24000) (24000)
(
Balances 32000
payment to liab. )
45000 -0- 42000 23000 (10000) (10000)
Balances (42000) (42000)
Allocation of Z deficit
Balances 3000 0 23000 (10000) (10000)
Invest by T (5714) (4286) 10000
Balances 3000 17286 (14286) -0-
payment to P 14286 14286
17286 17286 Mob:-0-
0128385030
Mr: Kareem Abo Zeed (17286) (17286) : 0106774350
Email: KareemAboZeed@yahoo.com
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 ….. Exam Ch.13 …..
-0- -0-
Balances
2- Journal entries:-

Cash $ 30000
P, capital $ 32000
T, capital $ 24000
Z, capital $ 24000
Other assets $ 110000

Liabilities $ 42000
Cash $ 42000

P, capital $ 5714
T, capital $ 4286
Z, capital $ 10000

Cash $14286
T, capital $ 14286

P, capital $ 17286
Cash $ 17286

Ex 2
After the realization of all non cash assets and the payment of all
liabilities, the balance sheet of the liquidatationPon, Quan & Ron LLP on
January 31, 1999, showed cash $ 15000; Pon, capital ($ 9000); Quan, capital $
8000; and Ron, capital $ 16000, with ( ) indicating a capital deficit. The partners
share net income and losses equally.

1- Prepare statement of liquidation to show the payment of $ 15000 cash

to the partners
2- Capital Q after allocation of P deficit = ………..

Solve
Mob: 0128385030
Mr: Kareem Abo Zeed : 0106774350
Email: KareemAboZeed@yahoo.com
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 ….. Exam Ch.13 …..

1-

Cash P T Z
15000 9000 8000 16000
Balance (9000) (4500) (4500)
Allocation of Z deficit
15000 3500 11500
Balances
(15000) (3500) (11500)
payment to partners
Balances -0- -0- -0- -0-

2- Capital , Q = 3500

Ex 3

John, Jake and Joe are partners with capital accounts of 90000, 78000
and 64000 respectively. They share profits and loss in the ratio of 30 : 40 : 30 .
when the partners decide to liquidate the business has 70000 in cash, non cash
assets totaling 260000, and 98000 in liabilities. The non cash assets are sold for
270000 and the creditors are paid.

Prepare schedule of partnership liquidation.

Solve

Cash Other Liab. John Jake Joe

assets 30 40 30
Balance 70000 260000 98000 90000 78000 64000
Sale of other assets 270000 260000 4000 3000
3000
Balances 340000 -0- 98000 93000 82000 67000
Payment to liab. (98000) (98000)

Balances
242000 0 93000 82000 (67000)
(242000) (93000) (82000) (67000)
payment to Partners
Balances -0- -0- -0- -0-
Mob: 0128385030
Mr: Kareem Abo Zeed : 0106774350
Email: KareemAboZeed@yahoo.com
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