In: Accounting
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 $9,500. At the date the partnership ceases operations, the balance sheet is as follows:
Cash | $ | 59,000 | Liabilities | $ | 44,500 |
Noncash assets | 180,000 | Alex, capital | 108,000 | ||
Bess, capital | 86,500 | ||||
Total assets | $ | 239,000 | Total liabilities and capital | $ | 239,000 |
Part A: Prepare journal entries for the following transactions:
Part B: Prepare a final statement of partnership liquidation.