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Exercise 2 Worksheet: Partnership Liquidation Schedule
Edmonds, Beatty, and Elder decided to dissolve their partnership and liquidate the business. The following balance sheet was created at that time showing current account balances:
Cash		$96,000	Liabilities		$70,000	This cell intentionally left blank.
Noncash assets		$354,000	Capital Edmonds (60%)		$202,000	This cell intentionally left blank.
Building and equipment (net)		$200,000	Capital Beatty (20%)		$56,000	This cell intentionally left blank.
			Capital Elder (20%)		$122,000	This cell intentionally left blank.
Total assets		$450,000	Total Liabilites and Capital		$450,000	This cell intentionally left blank.
The transactions listed below occurred during liquidation: Safe capital balances were distributed immediately to the partners. $18,000 in liquidation expenses were estimated as a basis for the computation. Noncash assets, with a $160,000 book value, were sold for $96,000. All liabilities were paid. Safe capital balances were once again distributed. $88,000 in remaining noncash assets were sold. $14,000 in liquidation expenses were paid. Cash remaining was distributed to the partners. Business financial records were closed permanently. Allocate income and prepare a partnership liquidation schedule, using a predistribution plan. Use the spaces below to enter your calculations.
Edmonds, Beatty, and Elder Schedule of Partnership Liquidation Final Balances
		Cash	Noncash Assets	Liabilities	Edmonds, Capital (60%)	Beatty, Capital (20%)	Elder, Capital (20%)
Beginning balances		$96,000	$354,000	$70,000	$202,000	$56,000	$122,000
Distribution of $8,000 (cash in excess of liabilities and estimated liquidation expenses) in accordance with predistribution plan Schedule 1
Updated balances
Noncash assets sold
Updated balances
All liabilities are paid
Updated balances
Distribution of $96,000 (cash in excess of liabilities and estimated liquidation expenses) in accordance with predistribution plan Schedule 1
First distribution
Next distribution
Next distribution
Updated balances
Noncash assets sold
Updated balances
Paid liquidation expenses
Updated balances
Final distribution based on ending capital account balances
Ending balance
This cell intentionally left blank.
			Edmonds, Capital	Beatty, Capital	Elder, Capital	This cell intentionally left blank.
Beginning balances						This cell intentionally left blank.
						This cell intentionally left blank.
Step 1 balances						This cell intentionally left blank.
						This cell intentionally left blank.
Step 2 balances						This cell intentionally left blank.
This cell intentionally left blank.
Predistribution Plan
Schedule 2					This cell intentionally left blank.
Partner	Capital Balance/ Loss Allocation		Maximum Loss That Can Be Absorbed		This cell intentionally left blank.
Edmonds					This cell intentionally left blank.
Beatty					This cell intentionally left blank.
Elder					This cell intentionally left blank.
This cell intentionally left blank.
Schedule 3					This cell intentionally left blank.
Partner	Capital Balance/ Loss Allocation		Maximum Loss That Can Be Absorbed		This cell intentionally left blank.
Edmonds					This cell intentionally left blank.
Elder					This cell intentionally left blank.

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