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MEDINA - Homework 1 (Midterm) No. 8

- The document describes the liquidation of Triple M Partnership. It provides the initial capital balances of the three partners: Miss had $300,000, Mister had $200,000, and Master had $300,000. - During liquidation, non-cash assets were sold for $700,000. Accounts payable of $760,000 were also paid. The deficiency of Master was absorbed by the other partners. Mister had a right of offset of $8,000. Additional investment by Miss was $12,000. The remaining cash was distributed and the partnership was fully liquidated.

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349 views3 pages

MEDINA - Homework 1 (Midterm) No. 8

- The document describes the liquidation of Triple M Partnership. It provides the initial capital balances of the three partners: Miss had $300,000, Mister had $200,000, and Master had $300,000. - During liquidation, non-cash assets were sold for $700,000. Accounts payable of $760,000 were also paid. The deficiency of Master was absorbed by the other partners. Mister had a right of offset of $8,000. Additional investment by Miss was $12,000. The remaining cash was distributed and the partnership was fully liquidated.

Uploaded by

Von Andrei Medina
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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NUMBER 8

GIVEN:
Capital balances before liquidation:
Miss 300,000
Mister 200,000
Master 300,000

ANSWER:
a. Prepare a statement of liquidation using the title Cash and Non-Cash for the Assets. Separate Ac

TRIPLE M PARTNERSHI
Statement of Partnership Liqui
March 31, 2019

Cash Non-Cash
Balances before liquidation 80,000 1,520,000
Sale of non-cash assets 700,000 (1,520,000)
Balances after sale of non-cash
780,000 -
assets
Payment of accounts payable (760,000)
Balances after payment of accounts
20,000 -
payable
Absorption of deficiency of Master by
Miss
Balances after absorption of
20,000 -
deficiency
Right of offset to Mister
Balances after right of offset 20,000 -
Additional investment by Miss 12,000
Balances after additional investment 32,000 -
Payment to partners (32,000) -

b. Prepare the entries to record the liquidation proceedings.


1. Sale of non-cash assets for 700,000

Cash 700,000
Miss, Capital 307,500
Mister, Capital 205,000
Master, Capital 307,500
Non-Cash Assets 1,520,000

2. Payment of accounts payable


Accounts Payable 760,000
Cash 760,000

3. Deficiency of Master absorbed by the other partners

Miss, Capital 4,500


Mister, Capital 3,000
Master, Capital 7,500

4. Right of offset is applied

Loan Payable to Mister 8,000


Mister, Capital 8,000

5. Additional investment of deficient but solvent partner

Cash 12,000
Miss, Capital 12,000

6. Distribution of remaining cash to appropriate partners

Loan Payable to Mister 32,000


Cash 32,000
Cash 80,000
Accounts Payable 760,000
Loan due to Mister 40,000

for the Assets. Separate Accounts Payable from Loan Payable to Mister.

TRIPLE M PARTNERSHIP
Statement of Partnership Liquidation
March 31, 2019

Loan Payable to Capital Balances


Liabilities
Mister Miss (3/8) Mister (2/8) Master (3/8)
760,000 40,000 300,000 200,000 300,000
(307,500) (205,000) (307,500)
760,000 40,000 (7,500) (5,000) (7,500)
(760,000)
- 40,000 (7,500) (5,000) (7,500)

(4,500) (3,000) 7,500

- 40,000 (12,000) (8,000) -


(8,000) 8,000
- 32,000 (12,000) - -
12,000
- 32,000 - - -
- (32,000) - - -

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