The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its business property. A balance sheet drawn up at this time shows the following account balances: Cash $ 64,000 Liabilities $ 44,000 Noncash assets 225,000 Frick, capital (60%) 132,000 Wilson, capital (20%) 36,000 Clarke, capital (20%) 77,000 Total assets $ 289,000 Total liabilities and capital $ 289,000 Part A Prepare a predistribution plan for this partnership. Part B The following transactions occur in liquidating this business: Distributed safe payments of cash immediately to the partners. Liquidation expenses of $9,000 are estimated as a basis for this computation. Sold noncash assets with a book value of $96,000 for $64,000. Paid all liabilities. Distributed safe payments of cash again. Sold remaining noncash assets for $52,000. Paid actual liquidation expenses of $7,000 only. Distributed remaining cash to the partners and closed the financial records of the business permanently. Produce a final statement of liquidation for this partnership using the predistribution plan to determine payments of cash to partners. Part C Prepare journal entries to record the liquidation transactions reflected in the final statement of liquidation.
The partnership of Frick, Wilson, and Clarke has elected to cease all operations and liquidate its business property. A balance sheet drawn up at this time shows the following account balances: Cash $ 64,000 Liabilities $ 44,000 Noncash assets 225,000 Frick, capital (60%) 132,000 Wilson, capital (20%) 36,000 Clarke, capital (20%) 77,000 Total assets $ 289,000 Total liabilities and capital $ 289,000 Part A Prepare a predistribution plan for this partnership. Part B The following transactions occur in liquidating this business: Distributed safe payments of cash immediately to the partners. Liquidation expenses of $9,000 are estimated as a basis for this computation. Sold noncash assets with a book value of $96,000 for $64,000. Paid all liabilities. Distributed safe payments of cash again. Sold remaining noncash assets for $52,000. Paid actual liquidation expenses of $7,000 only. Distributed remaining cash to the partners and closed the financial records of the business permanently. Produce a final statement of liquidation for this partnership using the predistribution plan to determine payments of cash to partners. Part C Prepare journal entries to record the liquidation transactions reflected in the final statement of liquidation.
Century 21 Accounting Multicolumn Journal
11th Edition
ISBN:9781337679503
Author:Gilbertson
Publisher:Gilbertson
Chapter23: Accounting For Partnerships
Section: Chapter Questions
Problem 3AP
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Question
The
| Cash | $ | 64,000 | Liabilities | $ | 44,000 | |
| Noncash assets | 225,000 | Frick, capital (60%) | 132,000 | |||
| Wilson, capital (20%) | 36,000 | |||||
| Clarke, capital (20%) | 77,000 | |||||
| Total assets | $ | 289,000 | Total liabilities and capital | $ | 289,000 | |
Part A
Prepare a predistribution plan for this partnership.
Part B
The following transactions occur in liquidating this business:
- Distributed safe payments of cash immediately to the partners. Liquidation expenses of $9,000 are estimated as a basis for this computation.
- Sold noncash assets with a book value of $96,000 for $64,000.
- Paid all liabilities.
- Distributed safe payments of cash again.
- Sold remaining noncash assets for $52,000.
- Paid actual liquidation expenses of $7,000 only.
- Distributed remaining cash to the partners and closed the financial records of the business permanently.
Produce a final statement of liquidation for this partnership using the predistribution plan to determine payments of cash to partners.
Part C
Prepare
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