In: Accounting
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 | $ | 71,000 | Liabilities | $ | 39,000 | |
Noncash assets | 291,000 | Frick, capital (60%) | 177,000 | |||
Wilson, capital (20%) | 47,000 | |||||
Clarke, capital (20%) | 99,000 | |||||
Total assets | $ | 362,000 | Total liabilities and capital | $ | 362,000 | |
Part A
Prepare a predistribution plan for this partnership.
Part B
The following transactions occur in liquidating this business:
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.