Glencoe Accounting

Chapter 28: Financial Statements and Liquidation of a Partnership

Homework Practice

Partnership Liquidation Entries

Rand and Brown decide to liquidate their partnership. The partners divide net income/net loss equally. Account balances immediately prior to the liquidation process are as follows:

Cash in Bank

$ 5,900

Accounts Receivable

10,000

Merchandise Inventory

50,000

Equipment

60,000

Accumulated Depreciation-Equipment

10,100

Accounts Payable

20,000

Notes Payable

6,800

Rand, Capital

42,500

Brown, Capital

46,500

Download the general journal form by clicking on Accounting Forms from the Student Center. Prepare entries to:

  1. Sell the accounts receivable to a finance broker for $9,000.
  2. Sell the merchandise inventory for $53,000.
  3. Sell the equipment for $46,000.
  4. Pay the accounts payable and the note payable.
  5. Distribute the remaining cash to the partners.
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