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Liquidating distributions for partnerships

I have tried and tried to do this problem and I am failing to do so miserably. This type of problem is completely new to me and I really want to, and need to understand how to do this. Can you please prepare the statement and explain to me how you went about doing so? Thank you for your time and help, it is greatly appreciated! Best regards, Jim

Installment Liquidation

Jones, Smith, and Tandy are partners in a furniture store that began liquidation on January 1, 2008 when the ledger contained the following account balances:

Debit Credit
Cash $15,000
Accounts Receivable 20,000
Inventories 65,000
Land 50,000
Buildings 100,000
Acc Depreciation - Buildings $40,000
Furniture and Fixtures 50,000
Acc Depreciation - Furniture & Fixt 30,000
Accounts Payable 80,000
Jones Capital (20%) 40,000
Smith Capital (30%) 60,000
Tandy Capital (50%) 50,000

Totals $300,000 $300,000

The following transactions and events occured during the liquidation process:

January: Inventories were sold for $20,000 cash, collections on
account totaled $14,000, and half of the amount due to
creditors was paid.
February:Land costing $40,000 was sold for $60,000, the remaining
land and buildings were sold for $40,000, half the
remaining receivables were collected, and the remainder
were uncollectible.
March: The remaining liabilities were paid, and available cash
was distributed to the partners in final liquidation.

Required: Prepare a statement of liquidation for the Jones, Smith and
Tandy partnership.

Solution Preview

Please see spreadsheet for all journal entries.

To approach this problem, begin by creating a January 1 statement.
Then create the entries for the January period. You will have a loss. Remember, in a liquidation, losses and gains are eliminated through posting to the partner's accounts. Since there is no notation to state otherwise, I presumed that the ...

Solution Summary

Explains the rules and steps in determining allocation of partnership liquidation. Allocation of gains and losses, determination of percentages for final liquidation.