The partners in Crane Company decide to liquidate the firm when the balance sheet shows the...

The partners in Crane Company decide to liquidate the firm when the balance sheet shows the following.

Crane Company Balance Sheet May 31, 2020
Assets			Liabilities and Owners’ Equity
Cash	$29,900		Notes payable	$13,000
Accounts receivable	24,500		Accounts payable	26,800
Allowance for doubtful accounts	(1,400	)	Salaries and wages payable	4,300
Inventory	34,800		A. Jamison, capital	33,800
Equipment	21,600		S. Moyer, capital	23,100
Accumulated depreciation—equipment	(5,700	)	P. Roper, capital	2,700
	$103,700			$103,700

The partners share income and loss 5:3:2. During the process of liquidation, the following transactions were completed in the following sequence.

1.		A total of $53,100 was received from converting noncash assets into cash.
2.		Gain or loss on realization was allocated to partners.
3.		Liabilities were paid in full.
4.		P. Roper paid his capital deficiency.
5.		Cash was paid to the partners with credit balances.

Prepare the entries to record the transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

b.

Post to the cash and capital accounts. (Post entries in the order of journal entries presented in the previous part. If ending balance is 0 enter 0 in the column for the normal balance for the account.)

c. Assume that Roper is unable to pay the capital deficiency. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

(1)		Prepare the entry to allocate Roper’s debit balance to Jamison and Moyer.
(2)		Prepare the entry to record the final distribution of cash.

Solutions

Expert Solution

ekkarill92 answered 2 years ago

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