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 $6,500. At the date the partnership ceases operations, the balance sheet is as follows: Cash Noncash assets Total assets $ 65,000 240,000 Liabilities Alex, capital Bess, capital $ 305,000 Total liabilities and capital Part A: Prepare journal entries for the following transactions that occurred in chronological order: a. Distributed safe cash payments to the partners. b. Paid $28,500 of the partnership’s liabilities. c. Sold noncash assets for $257,500. $ 47,500 168,000 89,500 $ 305,000 d. Distributed safe cash payments to the partners. e. Paid remaining partnership liabilities of $19,000. f. Paid $5,100 in liquidation expenses; no further expenses will be incurred. g. 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 $6,500. At the date the partnership ceases operations, the balance sheet is as follows: Cash Noncash assets Total assets $ 65,000 240,000 Liabilities Alex, capital Bess, capital $ 305,000 Total liabilities and capital Part A: Prepare journal entries for the following transactions that occurred in chronological order: a. Distributed safe cash payments to the partners. b. Paid $28,500 of the partnership’s liabilities. c. Sold noncash assets for $257,500. $ 47,500 168,000 89,500 $ 305,000 d. Distributed safe cash payments to the partners. e. Paid remaining partnership liabilities of $19,000. f. Paid $5,100 in liquidation expenses; no further expenses will be incurred. g. 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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Transcribed Image Text:Part B: Prepare a final statement of partnership liquidation.
Complete this question by entering your answers in the tabs below.
Required A Required B
Prepare journal entries for the following transactions that occurred in chronological order: (Do not round intermediate calculations. If no
entry is required for a transaction/event, select "No journal entry required" in the first account field.)
a. Distributed safe cash payments to the partners.
b. Paid $28,500 of the partnership's liabilities.
c. Sold noncash assets for $257,500.
d. Distributed safe cash payments to the partners.
e. Paid remaining partnership liabilities of $19,000.
f. Paid $5,100 in liquidation expenses; no further expenses will be incurred.
g. Distributed remaining cash held by the business to the partners.
Show Transcribed Text
1
2
3
4
6
Kecord the initial distribution of available cash based on
safe capital balance.
Record the payment of the partnership's liabilities.
7
Record the sale of noncash assets.
5 Record the payment of all remaining partnership
liabilities.
Record the entry to distribute safe cash payments to the
partners.
Record the payment of liquidation expenses.
Record the entry to distribute remaining cash held by the
X
alance.
Credit
Transcribed Image Text: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 $6,500. At the date the partnership
ceases operations, the balance sheet is as follows:
Cash
Noncash assets
Total assets
$ 65,000
240,000
$ 305,000
Liabilities
Alex, capital
Bess, capital
Total liabilities and capital
Part A: Prepare journal entries for the following transactions that occurred in chronological order:
a. Distributed safe cash payments to the partners.
b. Paid $28,500 of the partnership's liabilities.
c. Sold noncash assets for $257,500.
$ 47,500
168,000
89,500
$ 305,000
d. Distributed safe cash payments to the partners.
e. Paid remaining partnership liabilities of $19,000.
f. Paid $5,100 in liquidation expenses; no further expenses will be incurred.
g. Distributed remaining cash held by the business to the partners.
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