Alex and Bess have been in partnership for many years. The partners, who share profits and losses on a 70:30 basis, respectively, wish to retire and have agreed to liquidate the business. Liquidation expenses are estimated to be $5,500. At the date the partnership ceases operations, the balance sheet is as follows: Cash $ 48,000 Liabilities $ 36,000 Noncash assets 135,000 Alex, capital 94,500 Bess, capital 52,500 Total assets $ 183,000 Total liabilities and capital $ 183,000 Part A: Prepare journal entries for the following transactions: Distributed safe cash payments to the partners. Paid $21,600 of the partnership’s liabilities. Sold noncash assets for $147,000. Distributed safe cash payments to the partners. Paid remaining partnership liabilities of $14,400. Paid $4,100 in liquidation expenses; no further expenses will be incurred. Distributed remaining cash held by the business to the partners.
Alex and Bess have been in partnership for many years. The partners, who share profits and losses on a 70:30 basis, respectively, wish to retire and have agreed to liquidate the business. Liquidation expenses are estimated to be $5,500. At the date the partnership ceases operations, the balance sheet is as follows: Cash $ 48,000 Liabilities $ 36,000 Noncash assets 135,000 Alex, capital 94,500 Bess, capital 52,500 Total assets $ 183,000 Total liabilities and capital $ 183,000 Part A: Prepare journal entries for the following transactions: Distributed safe cash payments to the partners. Paid $21,600 of the partnership’s liabilities. Sold noncash assets for $147,000. Distributed safe cash payments to the partners. Paid remaining partnership liabilities of $14,400. Paid $4,100 in liquidation expenses; no further expenses will be incurred. Distributed remaining cash held by the business to the partners.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Alex and Bess have been in partnership for many years. The partners, who share
| Cash | $ | 48,000 | Liabilities | $ | 36,000 |
| Noncash assets | 135,000 | Alex, capital | 94,500 | ||
| Bess, capital | 52,500 | ||||
| Total assets | $ | 183,000 | Total liabilities and capital | $ | 183,000 |
Part A: Prepare
- Distributed safe cash payments to the partners.
- Paid $21,600 of the partnership’s liabilities.
- Sold noncash assets for $147,000.
- Distributed safe cash payments to the partners.
- Paid remaining partnership liabilities of $14,400.
- Paid $4,100 in liquidation expenses; no further expenses will be incurred.
- Distributed remaining cash held by the business to the partners.
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