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problem: The partners of the RichMax Corporation decide to liquidate the firm on DEC 3.

RichMax Corporation Balance Sheet as on 3/31/08

Assets

 

Liabilities and Owners Equity

 

Cash

$30,000

Notes Payable

$17,000

Accounts Receivable

33,000

Accounts Payable

24,000

Allowance for Doubtful A/C

(2,000)

Wages Payable

2,000

Merchandise Inventory

24,000

Rich, Capital

22,000

Equipment

10,000

Max, Capital

21,000

Accumulated Depreciation, Eqt

(8,000)

Rudy, Capital

1,000

Total

$87,000

Total

$87,000

Partners share income & loss in the ratio 1:2:3. During the process of liquidation, the following transactions were finished.

[A] A total of $42,000 was received from the sale of all of the non-cash assets.
[B] Liabilities fully paid.
[C] Rudy was unable to pay his capital deficiency.
[D] The final cash distribution was made to partners.

Make journal entries to record the liquidation.

Cost Accounting, Accounting

  • Category:- Cost Accounting
  • Reference No.:- M923494

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