1. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 23-3 Dissolving a Partnership

2. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 2 LESSON 23-3 ACCOUNT BALANCES BEFORE REALIZATION page 686

3. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 3 LESSON 23-3 GAIN ON REALIZATION page 686 1.Calculate the gain.2.Record the entry. 2 August 1, 20--. Received cash from sale of truck, $13,000.00: original cost, $20,000.00; total accumulated depreciation recorded to date, $8,000.00. Receipt No. 316. Gain on Realization =Book Value of Asset Sold –Value of Asset Received $1,000.00=–Cash$13,000.00 Cost$20,000.00 Accum. Depr. 8,000.00 Book Value$12,000.00 1

4. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 4 LESSON 23-3 LOSS ON REALIZATION page 687 1.Calculate the loss.2.Record the entry. 2 August 1. Received cash from sale of supplies, $1,100.00; balance of supplies account, $1,500.00. Receipt No. 317. Loss on Realization =Book Value of Asset Sold –Value of Asset Received $(400.00)=–Cash$1,100.00Supplies$1,500.00 1

5. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 5 LESSON 23-3 LIQUIDATING LIABILITIES page 688 August 4, 20--. Paid cash to all creditors for the amounts owed, $4,000.00. Check No. 422.

6. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 6 LESSON 23-3 ACCOUNT BALANCES AFTER LIQUIDATION OF NONCASH ASSETS AND PAYMENT OF LIABILITIES page 688

7. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 7 LESSON 23-3 $360.00 240.00 $600.00 ==== 60% 40% ×××× $600.00 Walker Jeter Total Share of the Balance of Loss and Gain on Realization =Fixed Percentage ×Balance of Loss and Gain on Realization DISTRIBUTING LOSS OR GAIN ON REALIZATION TO PARTNERS page 689 August 6, 20--. Recorded distribution of gain on realization: to Adam Walker, $360.00; to Shirley Jeter, $240.00. Memorandum No. 412. 1.Calculate each partner’s share of gain or loss. 2.Record entry to distribute gain or loss. 2 1

8. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 8 LESSON 23-3 DISTRIBUTING REMAINING CASH TO PARTNERS page 689 August 6. Recorded final distribution of remaining cash to partners: to Adam Walker, $18,360.00; to Shirley Jeter, $12,740.00. Check Nos. 423 and 424.

9. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 9 LESSON 23-3 TERMS REVIEW liquidation of a partnership realization limited liability partnership (LLP) page 690