Accounting for the liquidation of a partnership
The Kelly & Lena partnership has the following balances on June 30, 2012:
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KELLY & LENA Balance Sheet June 30, 2012 |
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|
Assets |
Liabilities and Owners’ equity |
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|
Cash |
$ 5,000 |
Accounts payable |
$20,000 |
|
Other assets |
30,000 |
Kelly, capital |
8,000 |
|
Lena, capital |
7,000 |
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|
Total assets |
$35,000 |
Total liabilities and owners’ equity |
$35,000 |
Kelly and Lena share profits 2:3.
Requirement
1. Journalize the sale of the noncash assets for $25,000, the payment of the liabilities, and the payment to the partners.