Sale, Payment of Liabilities, and Liquidation of Interest
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At the end of the year, Ruth has retired from the partnership, and Paul has joined it. However, the partnership is not going well. Tribbs, Bob, and Paul have decided to liquidate the partnership. Paul is a little concerned. While Tribbs has plenty of money, Bob is personally insolvent. The partnership sells the apartment building for $165,000, which is a loss from its book value of $189,000.
Capital Capital Capital
Cash Assets Liabilities Tribbs Bob Paul Total
Profit and loss percent 45% 30% 30%
Balances $2,000 $189,000 -$80,000 -$64,000 -$5,000 -$42,000 $0
Using these balances, complete the following:
? In an Excel worksheet, show the
o sale of the apartment building.
o payment of liabilities.
o payments to the partners in liquidation of the partnership.
? In the memo, accurately assess Bob's status in relation to the other partners.
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Solution Summary
The solution shows in the capital accounts, the sale, payment of liabilities and liquidation of interest.
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