The partnership of Butler, Osman, and Ward was formed several years ago as a local tax preparation firm. Two partners have reached retirement age, and the partners have decided to terminate operations and liquidate the business. Liquidation expenses of $58,000 are expected. The partnership balance sheet at the start of liquidation is as follows: Cash Accounts receivable. office equipment (net) Building (net) Land Total assets $ 54,000 84,000 74,000 230,000 220,000 $662,000 Liabilities Butler, loan Butler, capital (25 %) Osman, capital (25%) Ward, capital (50 %) Total liabilities and capital $ 194,000 54,000 170,000 54, 000 190,000 $ 662,000 The following transactions transpire in chronological order during the liquidation of the partnership: 1. Collected 90 percent of the accounts receivable and wrote the remainder off as uncollectible. 2. Sold the office equipment for $32,000, the building for $174,000, and the land for $216,000. 3. Distributed safe payments of cash. 4. Paid all liabilities in full. 5. Paid actual liquidation expenses of $42,000 only. 6. Made final cash distributions to the partners. Prepare journal entries to record these liquidation transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
The partnership of Butler, Osman, and Ward was formed several years ago as a local tax preparation firm. Two partners have reached retirement age, and the partners have decided to terminate operations and liquidate the business. Liquidation expenses of $58,000 are expected. The partnership balance sheet at the start of liquidation is as follows: Cash Accounts receivable. office equipment (net) Building (net) Land Total assets $ 54,000 84,000 74,000 230,000 220,000 $662,000 Liabilities Butler, loan Butler, capital (25 %) Osman, capital (25%) Ward, capital (50 %) Total liabilities and capital $ 194,000 54,000 170,000 54, 000 190,000 $ 662,000 The following transactions transpire in chronological order during the liquidation of the partnership: 1. Collected 90 percent of the accounts receivable and wrote the remainder off as uncollectible. 2. Sold the office equipment for $32,000, the building for $174,000, and the land for $216,000. 3. Distributed safe payments of cash. 4. Paid all liabilities in full. 5. Paid actual liquidation expenses of $42,000 only. 6. Made final cash distributions to the partners. Prepare journal entries to record these liquidation transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Chapter11: Property Dispositions
Section: Chapter Questions
Problem 53P
Related questions
Question
please answer within 30 minutes..
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 3 steps with 2 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
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,