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A and B are partners sharing profit in the ratio of 1:2 respectively. At liquidation point the liabilities and owners' equity are as follows:
A and B are partners sharing profit in the ratio of 1:2 respectively. At liquidation point the liabilities and owners' equity are as follows: Other assets, $80,000; Accounts Payable, $60,000; John, Capital $30,000; paul capital $10,000. After the other assets were sold only amount for distribution was $70,000.Directions:a. What was the cash balance before liquidationb. Make the entry to record the loss on realization and determine the capital balances of the partnersc. Prepare a statement of liquidation under each of the following independent situations.1. A and B are personally solvent2. A and B personally insolvent3. Aand B are personally insolvent and accounts payable include a loan payable to Paul of $5,000.
