Allocating profits and losses to the partners, accounting for the liquidation of a partnership ABAX 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. ABAX Adjusted Trial Balance June 30, 2012 Account Title Debit Credit Cash $ 33,000 Noncash assets 117,000 Notes payable $ 32,000 Alders, capital 22,000 Byron, capital 50,000 Calvin, capital 53,000 Alders, drawing 9,000 Byron, drawing 27,000 Calvin, drawing 49,000 Sales revenue 164,000 Salary expense 74,000 Rent expense 12,000 Totals $321,000 $321,000 Requirements 1. Prepare the June 30 entries to close the revenue, expense, income summary, and drawing accounts. 2. Insert the opening capital balances in the partners’ capital accounts, post the closing entries to their accounts, and determine each partner’s ending capital. 3. Prepare the June 30 entries to liquidate the partnership assuming the noncash assets are sold for $120,000.

Allocating profits and losses to the partners, accounting for the liquidation of a partnership ABAX is a partnership owned by Alders, Byron, and Calvin, who share profits and losses in the ratio of...

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

ABAX 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.

ABAX Adjusted Trial Balance June 30, 2012
Account Title	Debit	Credit
Cash	$ 33,000
Noncash assets	117,000
Notes payable	$ 32,000
Alders, capital	22,000
Byron, capital	50,000
Calvin, capital	53,000
Alders, drawing	9,000
Byron, drawing	27,000
Calvin, drawing	49,000
Sales revenue	164,000
Salary expense	74,000
Rent expense	12,000
Totals	$321,000	$321,000

Requirements

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

2. Insert the opening capital balances in the partners’ capital accounts, post the closing entries to their accounts, and determine each partner’s ending capital.

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

Answered Same Day Dec 24, 2021

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Robert answered on Dec 24 2021

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Allocating profits and losses to the partners, accounting for the liquidation of a partnership ABAX is a partnership owned by Alders, Byron, and Calvin, who share profits and losses in the ratio of...

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