Simple Illustration On Partnership’s Dissolution
Earlier article regarding partnership’s summary of steps upon the dissolution of a partnership. Append below a very basic illustration on this.
Jim and John are partners sharing profits or loss in the ratio 50:50 respectively. Both agree to dissolve the partnership and their Balance Sheet at the date of dissolution 31 December 2007 is as follows:
The assets other than cash were disposed for a total sum of $30,000. Required: Close the books of the firm.
Solution: Realization Account
Creditors Account
Capital Account
Cash Account
At the end of the day, the balance in the cash book should equate the payment to the partners capital account Click here for ALL articles under the heading of Partnership Account |
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