Question

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 $ 60,000 Liabilities $ 43,000 Noncash assets 201,000 Frick, capital (60%) 117,000 Wilson, capital (20%) 32,000 Clarke, capital (20%) 69,000 Total assets $ 261,000 Total liabilities and capital $ 261,000 Part A Prepare a predistribution plan for this partnership Part B The following transactions occur in liquidating this business: Distributed cash based on safe capital balances 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 $88,000 for $60,000. Paid all liabilities. Distributed cash based on safe capital balances again. Sold remaining noncash assets for $48,000. 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 based on safe capital balances. Part C Prepare journal entries to record the liquidation transactions reflected in the final statement of liquidation.Complete this question by entering your answers in the tabs below. Required ARequired BRequired C Prepare journal entries to record the liquidation transactions reflected in the final statement of liquidation. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Journal entry worksheet Record the entry for initial cash payments made to partners in accordance with predistribution plan. Note: Enter debits before credits. Transaction General Journal Debit Credit 1

Answer 1

ANSWER

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