In the process of liquidation,a partnership firm sells its non-cash assets of a book value of $46,000,for $76,000.Which of the following will be included in the entry to record the sale of assets at liquidation?
A)Gain on disposal will be debited by $30,000.
B)Gain on disposal will be credited by $76,000.
C)Gain on disposal will be debited by $76,000.
D)Gain on disposal will be credited by $30,000.

Question

Quizplus · Accepted Answer

The entry to record the sale of assets at liquidation would be:
Cash Account: $76,000 (Debit)
Accumulated Depreciation Account: $20,000 (Credit)
Asset Account: $46,000 (Credit)
Gain on Disposal Account: $30,000 (Credit)

The gain on disposal is the difference between the sales price and the book value of the asset. In this case, it is $30,000. Therefore, the gain on disposal account will be credited by $30,000. Option D is the correct answer.

In the Process of Liquidation,a Partnership Firm Sells Its Non-Cash