Case 1: Non cash assets were sold for 130 000

CARPESO AND TAO PARTNERSHIP

Statement of Partnership Liquidation
As of ___________

Non-
Cash Cash

Balances before Realization 120 000

Sale of non-cash asets and distribution of gain 130 000 (120 000)
Balances 130 000
Payment of Liabilities (40 000)
Balances 90 000
Cash Distribution
to Partners (90 000)

Debit
JOURNAL ENTRIES:

Cash 130 000

Gain/ Loss on Realization
Non- cash assets
To record the sale of non
cash assets at gain.

Gain/Loss on Realization 10 000

Carpeso, Capital
Tao, Capital
To distribute gain on
realization based on P/L Ratio

Accounts Payable 40 000

Cash
To record payment of liability.

Carpeso, Capital 64 000

Tao, Capital 26 000
Cash
To distribute remaining cash to
partners.
AND TAO PARTNERSHIP
f Partnership Liquidation
of ___________

PARTNERS' CAPITAL BALANCES

40% 60%
Liabilities Carpeso Tao

40 000 60 000 20 000

4 000 6 000
40 000 64 000 26 000
(40 000)
64 000 26 000

(64 000) (26 000)

Credit

10 000
120 000

4 000
6 000

40 000

90 000
Case 2: Non cash assets were sold for 70 000
CARPESO AND TAO PARTNERSHIP
Statement of Partnership Liquidation
As of ___________

Non-
Cash Cash

Balances before Realization 120 000

Sale of non-cash asets and distribution of gain 70 000 (120 000)
Balances 70 000
Payment of Liabilities (40 000)
Balances 30 000
Additional cash of Tao for the balance of his
deficiency. 10 000
Balances 40 000
Cash Distribution
to Partners (40 000)

Debit
JOURNAL ENTRIES:

Cash 70 000
Gain/Loss on Realization 50 000
Non- cash assets
To record the sale of non
cash assets at loss.

Carpeso, Capital 20 000

Tao, Capital 30 000
Gain/ Loss on Realization
To distribute loss on
realization based on P/L Ratio

Accounts Payable 40 000

Cash
To record payment of liability.

Cash 10 000
 Tao, Capital
To record additional cash by Tao
for his capital deficiency.

Carpeso, Capital 40 000

Cash
To distribute remaining cash to
partner.
AND TAO PARTNERSHIP
f Partnership Liquidation
of ___________

PARTNERS' CAPITAL BALANCES

40% 60%
Liabilities Carpeso Tao

40 000 60 000 20 000

(20 000) (30 000)
40 000 40 000 (10 000)
(40 000)
40 000 (10 000)

______ 10 000
40 000

(40 000)

Credit

120 000

50 000

40 000
10 000

40 000