Accounting Principles Their Use in Business Management

Cover Accounting Principles Their Use in Business Management
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00 A 's Loan 2, 000. 00 B's Capital 12, 000. 00 C's Capital 5, 000. 00 C's Loan 7, 000 . Oo Losses and Expense from Liquidation 36, 000. 00 The cash balance of $66, 500. 00 would then be distributed by means of the following entry: Notes Payable (secured) 15, 000. 00 Accounts Payable 2 5, 000 . Oo A's Loan 8, 000. 00 B's Loan 15, 000. 00 C's Loan 500 . Oo B's Capital 3, 000. 00 Cash 66, 500. 00 A summary of the liquidation operations should again be made for the month of January, though this ti...me there would be no balance sheet, inasmuch as all the assets have been sold and all the liabilities liquidated.
Let us now suppose that at the end of January the balance of each of the capital accounts was hi excess of the chargeable losses, and that at the same time funds were available to pay in full the claims of outside creditors and 50 per cent of the partners' loan accounts. The question then arises as to whether there should be a ratable distribution to the partners according to their loan account balances.


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