Accounting for the liquidation of a partnership
The partnership of Driscoll, Charles, and Gavin is liquidating. Business assets, liabilities, and partners’ capital balances prior to liquidation follow. The partners share profits and losses as follows: Driscoll, 20%; Charles, 30%; and Gavin, 50%.
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DRISCOLL, CHARLES, & GAVIN |
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|
Cash |
Noncash assets |
Liabilities |
Driscoll capital |
Charles capital |
Gavin capital |
|
$13,000 |
$130,000 |
$80,000 |
$18,000 |
$33,000 |
$12,000 |
Requirement
1. Journalize the sale of the assets for $165,000, the payment of the liabilities, and the payment of the partners’ final capital balances.