Statement of partnership liquidation. On june 3 2012, the firm of lyon, malone, and chen divided to liquidated their partnership. the partners have capital balances of 12000, 76000, and 104000 respectively. The cash balance is 19000, the book values of non cash assets total 218000, and liabilities total 45000. The partners share income and losses in the ratio of 1:2:2.
INSTRUCTIONS:
1. Prepare a statement of partnership liquidation, covering the period june 3-29, 2012. for each of the following independent assumptions: a. all of the non cash assets are sold for 272,000 in cash, the creditors are paid and the remaining cash is distributed to the partners.
b. all of the non-cash assets are sold for 105,000 in cash, the creditors are paid the partner wit the debit capital balance pays the amount owed to the firm and the remaining cash is distributed to the partners.
2. assume the partner with the capital deficiency in part b above declares bankruptcy and cant pay the deficiency. journalize the entries to allocate the partners deficiency and distribute the remaining cash.