immy Pesto and Calvin Fischoeder’s business goes bankrupt and needs to liquidate. Jimmy and Calvin’s income ratios are 60% and 40%, respectively. They sell their noncash assets to their competitor Bob for $105,000. The following is the partnership’s Balance Sheet: Jimmy Pesto’s Pizzeria Balance Sheet December 31, 20XX Assets Cash $20,000 Accounts Receivable 5,000 Supplies 3,000 Inventory 12,000 Equipment 80,000 Total Assets $120,000 Liabilities and Owners’ Equity Accounts Payable $55,000 J. Pesto, Capital 45,000 C. Fischoeder, Capital 20,000 Total Liabilities and Owners’ Equity $120,000 Prepare the journal entries to liquidate the business. Account Debit Credit

immy Pesto and Calvin Fischoeder’s business goes bankrupt and needs to liquidate. Jimmy and Calvin’s income ratios are 60% and 40%, respectively. They sell their noncash assets to their competitor Bob for $105,000. The following is the partnership’s Balance Sheet: Jimmy Pesto’s Pizzeria Balance Sheet December 31, 20XX Assets Cash $20,000 Accounts Receivable 5,000 Supplies 3,000 Inventory 12,000 Equipment 80,000 Total Assets $120,000 Liabilities and Owners’ Equity Accounts Payable $55,000 J. Pesto, Capital 45,000 C. Fischoeder, Capital 20,000 Total Liabilities and Owners’ Equity $120,000 Prepare the journal entries to liquidate the business. Account Debit Credit

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter13: Choice Of Business Entity—general Tax And Nontax Factors/formation

Section: Chapter Questions

Problem 43P

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Jimmy Pesto’s Pizzeria Balance Sheet December 31, 20XX
Assets
Cash	$20,000
Accounts Receivable	5,000
Supplies	3,000
Inventory	12,000
Equipment	80,000
Total Assets	$120,000
Liabilities and Owners’ Equity
Accounts Payable	$55,000
J. Pesto, Capital	45,000
C. Fischoeder, Capital	20,000
Total Liabilities and Owners’ Equity	$120,000

Account	Debit	Credit