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  • Chapter 12 Partnership - XLSX - Liquidation

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    The document summarizes the liquidation of a partnership called KSW Company with three partners. It provides two examples - one where there is no capital deficiency upon liquidation, and one where there is a capital deficiency that must be paid. In the first example, the partnership realizes $75,000 from non-cash assets, divides the gain among partners based on profit ratios, pays liabilities of $31,000, and settles partners' capital accounts. In the second example, the partnership realizes $42,000 from assets, divides a $60,000 loss among partners, pays liabilities, but one partner has a $1,800 capital deficiency that must be paid before final settlement of accounts.

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    Chapter 12 Partnership.xlsx - Liquidation

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    The document summarizes the liquidation of a partnership called KSW Company with three partners. It provides two examples - one where there is no capital deficiency upon liquidation, and one where there is a capital deficiency that must be paid. In the first example, the partnership realizes $75,000 from non-cash assets, divides the gain among partners based on profit ratios, pays liabilities of $31,000, and settles partners' capital accounts. In the second example, the partnership realizes $42,000 from assets, divides a $60,000 loss among partners, pays liabilities, but one partner has a $1,800 capital deficiency that must be paid before final settlement of accounts.

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    © All Rights Reserved
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    0 views2 pages

    Chapter 12 Partnership - XLSX - Liquidation

    Uploaded by

    mhrzyn27
    The document summarizes the liquidation of a partnership called KSW Company with three partners. It provides two examples - one where there is no capital deficiency upon liquidation, and one where there is a capital deficiency that must be paid. In the first example, the partnership realizes $75,000 from non-cash assets, divides the gain among partners based on profit ratios, pays liabilities of $31,000, and settles partners' capital accounts. In the second example, the partnership realizes $42,000 from assets, divides a $60,000 loss among partners, pays liabilities, but one partner has a $1,800 capital deficiency that must be paid before final settlement of accounts.

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    © All Rights Reserved
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    of 2

    Chapter 12 - Partnership

    Illustration 12-9, Page 12-13


    No Capital Deficiency
    KSW Company General Journal
    Statement of Liquidation Date Description Debit Credit
    December 31, 2022 2020
    Noncash R .Kwok, P. Shiu, W. Wong, December 31 Cash ( 75,000)
    Items Cash Assets Liabilities Capital Capital Capital Noncash assets ( 60,000)
    Profit or loss ratio 3 2 1 R. Kwok, Capital ( 7,500)
    Balances before liquidation ₱5,000 ₱60,000 ₱31,000 ₱15,000 ₱17,800 ₱1,200 P. Shiu, Capital ( 5,000)
    Realization of noncash assets and division of gain ( 75,000) ( (60,000) ( 7,500) ( 5,000) ( 2,500) W. Wong, Capital ( 2,500)
    Pay liabilities ( (31,000) ( (31,000) Realization of noncash assets and division of gain.
    ₱49,000 ( - ) ( - ) ₱22,500 ₱22,800 ₱3,700
    Final settlement ( (49,000) ( (22,500) ( (22,800) ( (3,700) 31 Liabilities
    Cash
    Pay liabilities

    31 R. Kwok, Capital ( 22,500)


    P. Shiu, Capital ( 22,800)
    W. Wong, Capital ( 3,700)
    Cash ( 49,000)
    Final settlement.

    Illustration 12-9, Page 12-13


    Capital Deficiency - payment General Journal
    KSW Company Date Description Debit Credit
    Statement of Liquidation 2020
    December 31, 2022 December 31 Cash ( 42,000)
    Noncash R .Kwok, P. Shiu, W. Wong, R. Kwok, Capital ( 9,000)
    Items Cash Assets Liabilities Capital Capital Capital P. Shiu, Capital ( 6,000)
    Profit or loss ratio 3 2 1 W. Wong, Capital ( 3,000)
    Balances before liquidation ₱5,000 ₱60,000 ₱31,000 ₱15,000 ₱17,800 ₱1,200 Noncash Assets ( 60,000)
    Realization of noncash assets and division of loss ( 42,000) ( (60,000) ( (9,000) ( (6,000) ( (3,000) Realization of noncash assets and division of loss.
    Pay liabilities ( (31,000) ( (31,000)
    ₱16,000 ( - ) ( - ) ₱6,000 ₱11,800 -₱1,800 31 Liabilities ( 31,000)
    Capital deficiency ( 1,800) ( 1,800) Cash ( 31,000)
    ₱17,800 ( - ) ( - ) ₱6,000 ₱11,800 ( - ) Pay liabilities
    Final settlement ( (17,800) ( (6,000) ( (11,800)
    31 Cash ( 1,800)
    W. Wong, Capital ( 1,800)
    Payment of capital deficiency.

    31 R. Kwok, Capital ( 6,000)


    P. Shiu, Capital ( 11,800)
    Cash ( 17,800)
    Final settlement.
    Illustration 12-9, Page 12-13 General Journal
    Capital Deficiency - non payment Date Description Debit Credit
    KSW Company 2020
    Statement of Liquidation December 31 Cash ( 42,000)
    December 31, 2022 R. Kwok, Capital ( 9,000)
    Noncash R .Kwok, P. Shiu, W. Wong, P. Shiu, Capital ( 6,000)
    Items Cash Assets Liabilities Capital Capital Capital W. Wong, Capital ( 3,000)
    Profit or loss ratio 3 2 1 Noncash Assets ( 60,000)
    Balances before liquidation ₱5,000 ₱60,000 ₱31,000 ₱15,000 ₱17,800 ₱1,200 Realization of noncash assets and division of loss.
    Realization of noncash assets and division of loss( 42,000) ( (60,000) ( (9,000) ( (6,000) ( (3,000)
    Pay liabilities ( (31,000) ( (31,000) 31 Liabilities ( 31,000)
    ₱16,000 ( - ) ( - ) ₱6,000 ₱11,800 -₱1,800 Cash ( 31,000)
    Capital deficiency ( (1,080) ( (720) ( 1,800) Pay liabilities
    ₱16,000 ( - ) ( - ) ₱4,920 ₱11,080 ( - )
    Final settlement ( (16,000) ( (4,920) ( (11,080) 31 R. Kwok, Capital ( 1,080)
    P. Shiu, Capital ( 720)
    W. Wong, Capital ( 1,800)
    Capital deficiency.

    31 R. Kwok, Capital ( 4,920)


    P. Shiu, Capital ( 11,080)
    Cash ( 16,000)
    Final settlement.

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