USA What journal entry i need to make out ?

[sanjay gupta]

Chart of Accounts



Current Asset

Property ABC

Closing Amount 50,000

Rehab Fix 50,000



Partners Equity



Partner XYZ Investment 50,000

Partner ABC Investment 50,000





Lets say when Property ABC gets sold, we have received 130,000$

So How to record entry for 130,000 and also nullifying Asset and Partners Equity and recording profit for 30,000. What Journal entry, I need to make for this.



Thanks

 

[bklynboy]

Difference between sale price and asset sold is a gain. Not clear from your descriptions but I think its 130-50-50 = gain of 30 ( I assumed Closing Amount is original cost net of depreciation and Rehab Fix is capitalized improvements?). So now Asset has 130,000 Cash, there is 30,000 in the P&L 100,000 in Partners Equity. If you are then distributing the cash back to the partners that would be treated as a distribution unless you are liquidating the entity. Its not clear to me what "to nullify Partner Equity" means - what are you trying to do? Is this real or just an example?

 

[sanjay gupta]

Yes, Gain of 30 is perfect.
Closing amount is net amount received which is 130,000 when we sold property.

Nullify means when we sold it then we should not have asset so we need to make entry.
Each partner is also given back their original investment and profit also.

It is real, just numbers are changed to make it simpler.

Thanks