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 $9,000. At the date the partnership ceases operations, the balance sheet is as follows: Cash $ 70,000 Liabilities $ 50,000 Noncash assets 290,000 Alex, capital 203,000 Bess, capital 107,000 Total assets $ 360,000 Total liabilities and capital $ 360,000 Part A: Prepare journal entries for the following transactions that occurred in chronological order: Distributed safe cash payments to the partners. Paid $30,000 of the partnership’s liabilities. Sold noncash assets for $310,000. Distributed safe cash payments to the partners. Paid remaining partnership liabilities of $20,000. Paid $7,100 in liquidation expenses; no further expenses will be incurred. Distributed remaining cash held by the business to the partners. Part B: Prepare a final statement of partnership liquidation. cash non-cash assets liabilities alex(capital) bess (capital)Beginning balancedistribution to partnerspaid liabilitiessold noncash assetsupdated balancesdistribution to partnersupdated balancespaid liabilitiespaid liquidation expensesupdated balancesdistribution to partnersclosing balances
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 $9,000. At the date the partnership ceases operations, the balance sheet is as follows: Cash $ 70,000 Liabilities $ 50,000 Noncash assets 290,000 Alex, capital 203,000 Bess, capital 107,000 Total assets $ 360,000 Total liabilities and capital $ 360,000 Part A: Prepare journal entries for the following transactions that occurred in chronological order: Distributed safe cash payments to the partners. Paid $30,000 of the partnership’s liabilities. Sold noncash assets for $310,000. Distributed safe cash payments to the partners. Paid remaining partnership liabilities of $20,000. Paid $7,100 in liquidation expenses; no further expenses will be incurred. Distributed remaining cash held by the business to the partners. Part B: Prepare a final statement of partnership liquidation. cash non-cash assets liabilities alex(capital) bess (capital)Beginning balancedistribution to partnerspaid liabilitiessold noncash assetsupdated balancesdistribution to partnersupdated balancespaid liabilitiespaid liquidation expensesupdated balancesdistribution to partnersclosing balances
Chapter11: Partnerships: Distributions, Transfer Of Interests, And Terminations
Section: Chapter Questions
Problem 4BCRQ
Related questions
Question
Alex and Bess have been in partnership for many years. The partners, who share
| Cash | $ | 70,000 | Liabilities | $ | 50,000 |
| Noncash assets | 290,000 | Alex, capital | 203,000 | ||
| Bess, capital | 107,000 | ||||
| Total assets | $ | 360,000 | Total liabilities and capital | $ | 360,000 |
Part A: Prepare
- Distributed safe cash payments to the partners.
- Paid $30,000 of the partnership’s liabilities.
- Sold noncash assets for $310,000.
- Distributed safe cash payments to the partners.
- Paid remaining partnership liabilities of $20,000.
- Paid $7,100 in liquidation expenses; no further expenses will be incurred.
- Distributed remaining cash held by the business to the partners.
Part B: Prepare a final statement of partnership liquidation. cash non-cash assets liabilities alex(capital) bess (capital)Beginning balancedistribution to partnerspaid liabilitiessold noncash assetsupdated balancesdistribution to partnersupdated balancespaid liabilitiespaid liquidation expensesupdated balancesdistribution to partnersclosing balances
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 8 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning