Problem
Lewis, Zapata, and Fowler share equally in net income and net losses. After the partnership sells all assets for cash, divides the losses on realization
The sale of assets when a partnership is being liquidated, and pays the liabilities, the balances in the capital accounts are as follows: Lewis, $73,500 Cr.; Zapata, $41,000 Cr.; Fowler, $17,000 Dr.
Required:
A. What term is applied to the debit balance in Fowler's capital account?
B. What is the amount of cash on hand?
C. On December 31, journalize the transaction that must take place for Lewis and Zapata to receive cash in the liquidation. The winding-up process when a partnership goes out of business. Process equal to their capital account balances. Refer to the Chart of Accounts for exact wording of account titles.