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Accounting 26th Edition by Carl Warren,James Reeve,Jonathan Duchac
Edition 26ISBN: 978-1285743615Accounting 26th Edition by Carl Warren,James Reeve,Jonathan Duchac
Edition 26ISBN: 978-1285743615 Exercise 45
Liquidating partnerships-capital deficiency
Lewis, Zapata, and Fowler share equally in net income and net losses. After the partnership sells all assets for cash, divides the losses on realization, and pays the liabilities, the balances in the capital accounts are as follows: Lewis, $73,500 Cr.; Zapata, $41,000 Cr.; Fowler, $17,000 Dr.
a. What term is applied to the debit balance in Fowler's capital account
b. What is the amount of cash on hand
c. Journalize the transaction that must take place for Lewis and Zapata to receive cash in the liquidation process equal to their capital account balances.
Lewis, Zapata, and Fowler share equally in net income and net losses. After the partnership sells all assets for cash, divides the losses on realization, and pays the liabilities, the balances in the capital accounts are as follows: Lewis, $73,500 Cr.; Zapata, $41,000 Cr.; Fowler, $17,000 Dr.
a. What term is applied to the debit balance in Fowler's capital account
b. What is the amount of cash on hand
c. Journalize the transaction that must take place for Lewis and Zapata to receive cash in the liquidation process equal to their capital account balances.
Explanation
Verified
Verified
a.
Capital deficiency:
During the liqu...
Accounting 26th Edition by Carl Warren,James Reeve,Jonathan Duchac
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