The partners share profits and losses as follows: Rachel, 50 percent; Adams, 30 percent; and Nixon, 20 percent. The partners are considering an offer of $180,000 for the accounts receivable, inventory, and plant and equipment as of September 30. The $180,000 will be paid to creditors and the partners in installments, the number and amounts of which are to be negotiated. The partners have decided to liquidate their partnership by installments instead of accepting the offer of $180,000. Cash is distributed to the partners at the end of each month. A summary of the liquidation transactions follows:

October

• $25,000      is collected on accounts receivable; balance is uncollectible.
• $20,000      received for the entire inventory.
• $1,500      liquidation expense paid.
• $40,000      paid to creditors.
• $10,000      cash retained in the business at the end of the month.

November

• $2,000      in liquidation expenses paid.
• As      part payment of his capital, Nixon accepted an item of special equipment      that he developed, which had a book value of $8,000. The partners agreed      that a value of $12,000 should be placed on this item for liquidation      purposes.
• $4,000      cash retained in the business at the end of the month.

December

• $150,000      received on sale of remaining plant and equipment.
• $1,000      liquidation expenses paid. No cash retained in the business.

Required:

Prepare a statement of partnership realization and liquidation with supporting schedules of safe payments to partners.

Use Excel formulas to make or evidence each of your calculations of all dollar amounts. Do not enter any dollar amounts directly, unless it is unavoidable for obvious reasons. Use the tab function at the bottom of the Excel file to complete the assignment.

Prepare and submit one Excel spreadsheet for this assignment.

Requirements:

• Show      calculations for all questions.
• Support      the writing portion of the assignment with credible sources.
• Use      terms, evidence, and concepts from class readings, including professional      business language.

Chapters 15 & 16 in Advanced Financial Accounting

Chapter 15 & Chapter 16 in Advanced Financial Accounting, PowerPoint

Pearson Education. (n.d.). Partnership accounting, 376-400. Retrieved from http://www.pearsoned.ca/highered/divisions/virtual_tours/lee/sample.pdf

Christensen, T., Cottrell, D., & Budd, C. (2019). Advanced financial accounting (12th ed.). New York, NY: McGraw-Hill.