Prepare the entries to liquidate the partnership

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Reference no: EM13711052

Q: Allocating profits and losses to the partners, accounting for the liquidation of a partnership

ABC is a partnership owned by Alders, Byron, and Calvin, who share profits and losses in the ratio of 1:3:4. The account balances of the partnership at June 30 follow.



ABC


Adjusted Trial Balance


June 30,2014



BALANCE
Account Title 
Debit
Credit 
Cash  $ 33,000

Non-cash Assets 
117,000

Notes payable 

$ 32,000
Alders Capital


22,000
Byron Capital


50,000
Calvin Capital 


53,000
Alders withdrawals
9,000

Byron withdrawals 
27,000

Calvin withdrawals 
49,000

Sales Revenue


164,000
Salaries Expense 
74,000

Rent Expense 
12,000

Total  $ 321,000 $ 321,000

Requirements

1. Prepare the June 30 entries to close the revenue, expense, income summary, and withdrawal accounts.

2. Open each partner's capital T-account with the adjusted balance, post the closing entries to their accounts, and determine each partner's ending capital balance.

3. Prepare the June 30 entries to liquidate the partnership assuming the non-cash assets are sold for $120,000.

Reference no: EM13711052

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