The partners of Grafton Company have decided to liquidate their business. Noncash assets were sold for $115,000. The income ratios of the partners Kale D., Croix D., and Marais K. are 2:3:3, respectively. Complete the following schedule of cash payments for Grafton Company.
|
Noncash |
Kale D., |
Croix D., |
Marais K., |
|||
|
Item |
Cash |
+ Assets |
= Liabilities |
+ Capital |
+ Capital |
+ Capital |
|
Balances before liquidation |
10,000 |
85,000 |
40,000 |
15,000 |
35,000 |
5,000 |
|
Sale of noncash assets |
||||||
|
and allocation of gain |
||||||
|
New balances |
||||||
|
Pay liabilities |
||||||
|
New balances |
||||||
|
Cash distribution to |
||||||
|
partners |
||||||
|
Final balances |
Kessington Company wishes to liquidate the firm by distributing the company’s cash to the three partners. Prior to the distribution of cash, the company’s balances are: Cash $45,000; Rollings, Capital (Cr.) $28,000; Havens, Capital (Dr.) $12,000; and Ostergard, Capital (Cr.) $29,000. The income ratios of the three partners are 4:4:2, respectively. Prepare the entry to record the absorption of Havens’ capital deficiency by the other partners and the distribution of cash to the partners with credit balances.