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    Evelyn Morillo
    1. The document summarizes the liquidation of a partnership between Watin and Veloso. It shows the sale of non-cash assets realizing $85,000 which was distributed between the partners' capital accounts. Liabilities of $60,000 were paid off leaving $45,000 cash which was distributed to the partners. 2. This second document also summarizes a partnership liquidation, but in this case Watin was insolvent so Veloso had to absorb Watin's $7,000 capital deficiency, leaving $45,000 to distribute to the partners.

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    5 2

    Uploaded by

    Evelyn Morillo
    389 views8 pages
    1. The document summarizes the liquidation of a partnership between Watin and Veloso. It shows the sale of non-cash assets realizing $85,000 which was distributed between the partners' capital accounts. Liabilities of $60,000 were paid off leaving $45,000 cash which was distributed to the partners. 2. This second document also summarizes a partnership liquidation, but in this case Watin was insolvent so Veloso had to absorb Watin's $7,000 capital deficiency, leaving $45,000 to distribute to the partners.

    Original Description:

    Dissolution and liquidation with offset loan against capital deficiency

    Original Title

    5-2

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    1. The document summarizes the liquidation of a partnership between Watin and Veloso. It shows the sale of non-cash assets realizing $85,000 which was distributed between the partners' capital accounts. Liabilities of $60,000 were paid off leaving $45,000 cash which was distributed to the partners. 2. This second document also summarizes a partnership liquidation, but in this case Watin was insolvent so Veloso had to absorb Watin's $7,000 capital deficiency, leaving $45,000 to distribute to the partners.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    389 views8 pages

    5 2

    Uploaded by

    Evelyn Morillo
    1. The document summarizes the liquidation of a partnership between Watin and Veloso. It shows the sale of non-cash assets realizing $85,000 which was distributed between the partners' capital accounts. Liabilities of $60,000 were paid off leaving $45,000 cash which was distributed to the partners. 2. This second document also summarizes a partnership liquidation, but in this case Watin was insolvent so Veloso had to absorb Watin's $7,000 capital deficiency, leaving $45,000 to distribute to the partners.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    You are on page 1of 8

    1.

    Watin is solvent partner


    WATIN AND VELOSO PARTNERSHIP
    Statement of Partnership Liquidation
    As of ___________

    Cash

    Balances before Realization 20 000


    Sale of non-cash asets and distribution of gain 85 000
    Balances 105 000
    Payment of Liabilities (60 000)
    Balances 45 000
    Watin's Loan offset against his capital deficiency _______
    Balances 45 000
    Watin's additional cash for his capital deficiency 7 000
    Balances 52 000
    Cash Distribution
    to Partners (52 000)

    JOURNAL ENTRIES:
    Debit

    Cash 85 000
    Watin, Capital 57 000
    Veloso, Capital 38 000
    Non-cash assets
    To record sale of non-cash assets
    and distribution of realization loss.

    Accounts Payable 60 000


    Cash
    To record payment of liability.

    Watin, Loan 10 000


    Watin, Capital
    To offset Watin's loan account
    to his capital deficiency
    Cash 7 000
    Watin, Capital
    To record additional cash
    of Watin for his deficiency

    Veloso, Capital 52 000


    Cash
    To distribute remaining cash to
    partner.
    D VELOSO PARTNERSHIP
    f Partnership Liquidation
    of ___________
    PARTNERS' CAPITAL BALANCES
    Non- Watin 60% 40%
    Cash Liabilities Loan Watin Veloso

    180 000 60 000 10 000 40 000 90 000


    (180 000) (57 000) (38 000)
    60 000 10 000 (17 000) 52 000
    (60 000)
    10 000 (17 000) 52 000
    (10 000) 10 000 _______
    (7 000) 52 000
    7 000 _______
    52 000

    (52 000)

    Credit

    180 000

    60 000

    10 000
    7 000

    52 000
    2. Watin is insolvent partner
    WATIN AND VELOSO PARTNERSHIP
    Statement of Partnership Liquidation
    As of ___________

    Cash

    Balances before Realization 20 000


    Sale of non-cash asets and distribution of gain 85 000
    Balances 105 000
    Payment of Liabilities (60 000)
    Balances 45 000
    Watin's Loan offset against his capital deficiency _______
    Balances 45 000
    Deficiency of Watin to be absorbed by Veloso ______
    Balances 45 000
    Cash Distribution
    to Partners (45 000)

    JOURNAL ENTRIES:
    Debit

    Cash 85 000
    Watin, Capital 57 000
    Veloso, Capital 38 000
    Non-cash assets
    To record sale of non-cash assets
    and distribution of realization loss.

    Accounts Payable 60 000


    Cash
    To record payment of liability.

    Watin, Loan 10 000


    Watin, Capital
    To offset Watin's loan account
    to his capital deficiency
    Veloso, Capital 7 000
    Watin, Capital
    To record the absorption
    of Veloso to Watin's deficiency.

    Veloso, Capital 45 000


    Cash
    To distribute remaining cash to
    partner.
    D VELOSO PARTNERSHIP
    f Partnership Liquidation
    of ___________
    PARTNERS' CAPITAL BALANCES
    Non- Watin 60% 40%
    Cash Liabilities Loan Watin Veloso

    180 000 60 000 10 000 40 000 90 000


    (180 000) (57 000) (38 000)
    60 000 10 000 (17 000) 52 000
    (60 000)
    10 000 (17 000) 52 000
    (10 000) 10 000 _______
    (7 000) 52 000
    7 000 (7 000)
    45 000

    (45 000)

    Credit

    180 000

    60 000

    10 000
    7 000

    45 000

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