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

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

3. 3
LESSON 23-3CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
GAIN ON REALIZATIONGAIN ON REALIZATION page 686
1. Calculate the gain. 2. Record the entry.
22
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
11

4. 4
LESSON 23-3CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LOSS ON REALIZATIONLOSS ON REALIZATION page 687
1. Calculate the loss. 2. Record the entry.
22
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 $1,100.00 Supplies $1,500.00
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5. 5
LESSON 23-3CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LIQUIDATING LIABILITIESLIQUIDATING LIABILITIES page 688
August 4, 20--. Paid cash to all creditors for the amounts owed,
$4,000.00. Check No. 422.

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

7. 7
LESSON 23-3CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
$360.00
240.00
$600.00
=
=
60%
40%
×
×
$600.00
$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 ONDISTRIBUTING LOSS OR GAIN ON
REALIZATION TO PARTNERSREALIZATION 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.
22
11

8. 8
LESSON 23-3CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
DISTRIBUTING REMAINING CASH TODISTRIBUTING REMAINING CASH TO
PARTNERSPARTNERS 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. 9
LESSON 23-3CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
TERMS REVIEWTERMS REVIEW
 liquidation of a partnership
 realization
 limited liability partnership (LLP)
page 690

10. 9
LESSON 23-3CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
TERMS REVIEWTERMS REVIEW
 liquidation of a partnership
 realization
 limited liability partnership (LLP)
page 690