Bob and Ted are partners. Bob is a 70% partner and Ted is a 30% partner. They have decided to liquidate the partnership. Liquidation expenses are estimated to be $6,000. The partnership balance sheet at the date of liquidation is as follows:   Assets: Cash                      60,000 Non cash assets  180,000 Total assets        240,000   Liabilities and capital: Liabilities                               15,000 Total capital                          225,000 Total liabilities and capital 240,000 As of the date of liquidation Bob has 80,000 of capital and Ted  has 145,000 of capital . Prepare journal entries for the following transactions: Distributed safe cash payments to the partners Paid the liabilities in full Sold noncash assets for 150,000 Distributed safe cash payments to the partners Paid liquidating expenses totaling 4,000 Made final distributions to the partners

SWFT Corp Partner Estates Trusts
42nd Edition
ISBN:9780357161548
Author:Raabe
Publisher:Raabe
Chapter11: Partnerships: Distributions, Transfer Of Interests, And Terminations
Section: Chapter Questions
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Bob and Ted are partners. Bob is a 70% partner and Ted is a 30% partner. They have decided to liquidate the partnership. Liquidation expenses are estimated to be $6,000.

The partnership balance sheet at the date of liquidation is as follows:

 

Assets:

Cash                      60,000

Non cash assets  180,000

Total assets        240,000

 

Liabilities and capital:

Liabilities                               15,000

Total capital                          225,000

Total liabilities and capital 240,000

As of the date of liquidation Bob has 80,000 of capital and Ted  has 145,000 of capital . Prepare journal entries for the following transactions:

  • Distributed safe cash payments to the partners
  • Paid the liabilities in full
  • Sold noncash assets for 150,000
  • Distributed safe cash payments to the partners
  • Paid liquidating expenses totaling 4,000
  • Made final distributions to the partners

 

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