Chapter 5
Partnerships
247
AP-11B (
8
)
Chong partnership was terminated on December 31, 2016 due to a dispute between partners.
Before liquidation the total assets were valued at $600,000 and total liabilities were valued
at $250,000. The partners’ equity balances were as follows: Partner X—$60,000, Partner
Y—$90,000 and Partner Z—$200,000. Net assets were sold for $320,000. The partnership
agreement states profit and losses are to be shared in the ratio 2:3:3 between Partner X, Y and
Z respectively. Prepare the journal entries to record the liquidation of the business.
Date
Account Title and Explanation
Debit
Credit
