Alex and Bess have been in partnership for many years. The partners, who share profits and losses on a 60:40 basis, respectively, wish to retire and have agreed to liquidate the business. Liquidation expenses are estimated to be $5,000. At the date the partnership ceases operations, the balances are as follows: Cash . . . . . . . . . . . . . . . . . . . $ 50,000 Liabilities . . . . . . . . . . . . .. . . $ 40,000Noncash assets . . . . . . . . . 150,000 Alex, capital . . . . . . . . . . . . . 90,000Bess, capital . . . . . . . . . . . . 70,000 Part APrepare journal entries for the following transactions:a. Distributed safe cash payments to the partners.b. Paid $30,000 of the partnership’s liabilities.c. Sold noncash assets for $160,000.d. Distributed safe cash payments to the partners.e. Paid remaining partnership liabilities of $10,000.f. Paid $4,000 in liquidation expenses; no further expenses will be incurred.g. Distributed remaining cash held by the business to the partners.Part BPrepare a final statement of partnership liquidation.
Alex and Bess have been in
are estimated to be $5,000. At the date the partnership ceases operations, the balances are as follows:
Cash . . . . . . . . . . . . . . . . . . . $ 50,000 Liabilities . . . . . . . . . . . . .. . . $ 40,000
Noncash assets . . . . . . . . . 150,000 Alex, capital . . . . . . . . . . . . . 90,000
Bess, capital . . . . . . . . . . . . 70,000
Part A
Prepare
a. Distributed safe cash payments to the partners.
b. Paid $30,000 of the partnership’s liabilities.
c. Sold noncash assets for $160,000.
d. Distributed safe cash payments to the partners.
e. Paid remaining partnership liabilities of $10,000.
f. Paid $4,000 in liquidation expenses; no further expenses will be incurred.
g. Distributed remaining cash held by the business to the partners.
Part B
Prepare a final statement of partnership liquidation.
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