P 1910A L06 1 Distribution of cash to partners Nelson 30000

P 19-10A (L06) -1. Distribution of cash to partners: Nelson, $30,000 STATEMENT OF PARTNERSHIP LIQUIDATION WITH LOSS After several years of operations, the partnership of Nelson, Pope, and Williams is to be liquidated. After making closing entries on March 31, 20-, the following accounts remain open: Account Balance Account Title Debit Credit Cash $15,000 Inventory 40,000 766

Solution

Answer a. Cash Non Cash Assets Liabilities C W Nelson J R Pope M L Williams Balance          15,000          260,000          75,000          40,000           60,000          100,000 Sale of Non Cash Assets       230,000       (260,000)                   -         (10,000)         (10,000)          (10,000) Sub-total       245,000                     -            75,000          30,000           50,000            90,000 Payment of Liabilities       (75,000)                     -         (75,000)                   -                       -                       -   Sub-total       170,000                     -                     -            30,000           50,000            90,000 Cash paid     (170,000)       (30,000)         (50,000)          (90,000) Sub-total     (170,000)                     -                     -                     -                       -                       -   Answer b. Journal Entry Date Particulars Dr. Amt. Cr. Amt. a. Cash    230,000.00 Loss on Sale of Non Cash Assets      30,000.00 Inventory      40,000.00 Other Assets    220,000.00 (record the sale of non cash assets) b. C W Nelson, Capital      10,000.00 J R Pope, Capital      10,000.00 M L Williams, Capital      10,000.00 Loss on Sale of Non Cash Assets      30,000.00 (Record the allocation of loss between partners) c. Liabilities      75,000.00 Cash      75,000.00 (Record the payment of liabilities) d. C W Nelson, Capital      30,000.00 J R Pope, Capital      50,000.00 M L Williams, Capital      90,000.00 Cash    170,000.00 (record the distribution of cash to partners)