Reference no: EM13711052

Q: Allocating profits and losses to the partners, accounting for the liquidation of a partnership

ABC is a partnership owned by Alders, Byron, and Calvin, who share profits and losses in the ratio of 1:3:4. The account balances of the partnership at June 30 follow.

		ABC
		Adjusted Trial Balance
		June 30,2014
			BALANCE
Account Title		Debit		Credit
Cash	$	33,000
Non-cash Assets		117,000
Notes payable			$	32,000
Alders Capital				22,000
Byron Capital				50,000
Calvin Capital				53,000
Alders withdrawals		9,000
Byron withdrawals		27,000
Calvin withdrawals		49,000
Sales Revenue				164,000
Salaries Expense		74,000
Rent Expense		12,000
Total	$	321,000	$	321,000

Requirements

1. Prepare the June 30 entries to close the revenue, expense, income summary, and withdrawal accounts.

2. Open each partner's capital T-account with the adjusted balance, post the closing entries to their accounts, and determine each partner's ending capital balance.

3. Prepare the June 30 entries to liquidate the partnership assuming the non-cash assets are sold for $120,000.