Reference no: EM13573188

After the accounts are closed on February 3, 2014, prior to liquidating the partnership, the capital accounts of William Gerloff, Joshua Chu, and Courtney Jewett are $19,300, $4,500, and $22,300, respectively. Cash and noncash assets total $5,200 and $55,900, respectively. Amounts owed to creditors total $15,000. The partners share income and losses in the ratio of 2:1:1. Between February 3 and February 28, the noncash assets are sold for $34,300, the partner with the capital deficiency pays the deficiency to the partnership, and the liabilities are paid.

Required:

1. Prepare a statement of partnership liquidation, indicating (a) the sale of assets and division of loss, (b) the payment of liabilities, (c) the receipt of the deficiency (from the appropriate partner), and (d) the distribution of cash.

Enter any subtractions (balance deficiencies, payments, cash distributions, divisions of loss) as negative numbers using a minus sign. If there is no amount or an amount is zero, enter "0".

Gerloff, Chu, and Jewett Statement of Partnership Liquidation For Period February 3-28, 2014
	Cash	+	Noncash Assets	=	Liabilities	+	Capital Gerloff (2/4)	+	Capital Chu (1/4)	+	Capital Jewett (1/4)
Balances before realization	$		$		$		$		$		$
Sale of assets and division of loss
Balances after realization	$		$		$		$		$		$
Payment of liabilities
Balances after payment of liabilities	$		$		$		$		$		$
Receipt of deficiency
Balances	$		$		$		$		$		$
Cash distributed to partners
Final balances	$		$		$		$		$		$

2. Assume the partner with the capital deficiency declares bankruptcy and is unable to pay the deficiency.

a. Journalize the entry to allocate the partner's deficiency. For a compound transaction, if an amount box does not require an entry, leave it blank.

ACCOUNT	DEBIT	CREDIT

b. Journalize the entry to distribute the remaining cash. For a compound transaction, if an amount box does not require an entry, leave it blank.

ACCOUNT	DEBIT	CREDIT