Alex and Bess have been in partnership for many years. The partners, who share profits and losses on a 70:30 basis, respectively, wish to retire and have agreed to liquidate the business. Liquidation expenses are estimated to be $6,500. At the date the partnership ceases operations, the balance sheet is as follows: Cash Noncash assets Total assets Liabilities Alex, capital Bess, capital $ 305,000 Total liabilities and capital $ 65,000 240,000 Part A: Prepare journal entries for the following transactions that occurred in chronological order: a. Distributed safe cash payments to the partners. b. Paid $28,500 of the partnership's liabilities. c. Sold noncash assets for $257,500. $ 47,500 168,000 89,500 $ 305,000 d. Distributed safe cash payments to the partners. e. Paid remaining partnership liabilities of $19,000. f. Paid $5,100 in liquidation expenses; no further expenses will be incurred. g. Distributed remaining cash held by the business to the partners.
Alex and Bess have been in partnership for many years. The partners, who share profits and losses on a 70:30 basis, respectively, wish to retire and have agreed to liquidate the business. Liquidation expenses are estimated to be $6,500. At the date the partnership ceases operations, the balance sheet is as follows: Cash Noncash assets Total assets Liabilities Alex, capital Bess, capital $ 305,000 Total liabilities and capital $ 65,000 240,000 Part A: Prepare journal entries for the following transactions that occurred in chronological order: a. Distributed safe cash payments to the partners. b. Paid $28,500 of the partnership's liabilities. c. Sold noncash assets for $257,500. $ 47,500 168,000 89,500 $ 305,000 d. Distributed safe cash payments to the partners. e. Paid remaining partnership liabilities of $19,000. f. Paid $5,100 in liquidation expenses; no further expenses will be incurred. g. Distributed remaining cash held by the business to the partners.
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter4: Gross Income
Section: Chapter Questions
Problem 28P
Related questions
Question
PLEASE ANSWER ALL WITH COMPLETE AND CORRECT WORKING THANKS
1 Record the inıtial distribution of available cash based on safe capital balance.
2 Record the payment of the partnership's liabilities.
3 Record the sale of noncash assets.
4 Record the entry to distribute safe cash payments to the partners.
5 Record the payment of all remaining partnership liabilities.
6 Record the payment of liquidation expenses.
7 Record the entry to distribute remaining cash held by the business to the partners.
Transcribed Image Text:Alex and Bess have been in partnership for many years. The partners, who share profits and losses on a 70:30 basis, respectively, wish
to retire and have agreed to liquidate the business. Liquidation expenses are estimated to be $6,500. At the date the partnership
ceases operations, the balance sheet is as follows:
Cash
Noncash assets
Total assets
Liabilities
Alex, capital
Bess, capital
$ 305,000 Total liabilities and capital
$ 65,000
240,000
Part A: Prepare journal entries for the following transactions that occurred in chronological order:
a. Distributed safe cash payments to the partners.
b. Paid $28,500 of the partnership's liabilities.
c. Sold noncash assets for $257,500.
$ 47,500
168,000
89,500
$ 305,000
d. Distributed safe cash payments to the partners.
e. Paid remaining partnership liabilities of $19,000.
f. Paid $5,100 in liquidation expenses; no further expenses will be incurred.
g. Distributed remaining cash held by the business to the partners.
Transcribed Image Text:Part B: Prepare a final statement of partnership liquidation.
Complete this question by entering your answers in the tabs below.
Required A Required B
Prepare journal entries for the following transactions that occurred in chronological order: (Do not round intermediate calculations. If no
entry is required for a transaction/event, select "No journal entry required" in the first account field.)
a. Distributed safe cash payments to the partners.
b. Paid $28,500 of the partnership's liabilities.
c. Sold noncash assets for $257,500.
d. Distributed safe cash payments to the partners.
e. Paid remaining partnership liabilities of $19,000.
f. Paid $5,100 in liquidation expenses; no further expenses will be incurred.
g. Distributed remaining cash held by the business to the partners.
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