On February 1, 2014, the partnership of M. Burns and P. Arch decided to liquidate their partnership.
Burns and Arch share income and loss in a ratio shown beside their capital balance. Just before the liquidation, the partnership balance sheet showed the following:
Burns and Arch Partnership
Liabilities and Partner's Equity
cash, any gain or loss on the sale is allocated to the partners in their sharing ratio.
The accounts payable are paid and the remaining cash is paid to the two partners.
Assume that any deficiency in a partner's capital account is paid by the partner
Hint: Prepare t-accounts for the partners to see if there is a deficiency
Prepare the entries to record the liquidation of the partnership. 10 marks
Use of cell referencing from the balance sheet, where appropriate 2 marks
Accounting For Partnerships
Length: 5 pages (275 Words)
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