Reference no: EM132713379

Questions -

Q1. Bold and Victory decide to liquidate their partnership business.

Their capital balances were $40,000 each, and they share income and losses in the ratio of 3:1, respectively. On the date of liquidation, the following balances were recorded in the books of the firm:

Cash $50,000

Noncash assets $90,000

Accounts payable $60,000

The noncash assets are sold for $34,000 and all liabilities duly paid off.

Liquidation expenses amounted to $4,000.

Both partners are personally solvent.

Required - Prepare all the liquidation entries necessary to close the books of accounts.

Q2. Betta, Gretta and Jetta operate a partnership business sharing profits and losses in the ratio of 5:3:2. Their capital balances at the beginning of the year were $60,000, $40,000 and $30,000 respectively.

For the year ending June 30, 2020 the following information is given to you.

Net Income from operations $120,000

Salaries paid to Betta and Gretta were $500 per month.

Jetta was paid a bonus of $5,000 for the year.

All the partners were to receive interest on capital @6% per annum on their beginning capital balances. Betta, Gretta and Jetta withdrew $6,000, $5,000 and $8,000 respectively.

Required - Prepare statement to show the ending capital account balances of the 3 partners at the end of June 30, 2020.

Q3. Bold and Victory decide to liquidate their partnership business.

Their capital balances were $40,000 each, and they share income and losses in the ratio of 3:1, respectively. On the date of liquidation, the following balances were recorded in the books of the firm:

Cash $50,000

Noncash assets $90,000

Accounts payable $60,000

The noncash assets are sold for $34,000 and all liabilities duly paid off.

Liquidation expenses amounted to $4,000.

Both partners are personally solvent.

Required - Prepare all the liquidation entries necessary to close the books of accounts.