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Alex and Bess have been in partnership for many years. The partners, who share profits and losses on a 60:40 basis, respectively, wish to retire and have agreed to liquidate the business. Liquidation expenses are estimated to be $7,000. At the date the partnership ceases operations, the balance sheet is as follows: Cash Noncash assets Total assets $ 66,000 250,000 $ 316,000 Liabilities Alex, capital Bess, capital Total liabilities and capital $ 48,000 150,000 118,000 $ 316,000

Alex and Bess have been in partnership for many years. The partners, who share profits and losses on a 60:40 basis, respectively, wish to retire and have agreed to liquidate the business. Liquidation expenses are estimated to be $7,000. At the date the partnership ceases operations, the balance sheet is as follows: Cash Noncash assets Total assets $ 66,000 250,000 $ 316,000 Liabilities Alex, capital Bess, capital Total liabilities and capital $ 48,000 150,000 118,000 $ 316,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
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 profits and losses on a 60:40 basis, respectively, wish to retire and have agreed to liquidate the business. Liquidation expenses are estimated to be $7,000. At the date the partnership ceases operations, the balance sheet is as follows: Cash Noncash assets Total assets $ 66,000 250,000 $ 316,000 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 $28,800 of the partnership's liabilities. c. Sold noncash assets for $268.000. d. Distributed safe cash payments to the partners. e. Paid remaining partnership liabilities of $19,200. f. Paid $5,500 in liquidation expenses; no further expenses will be incurred. g. Distributed remaining cash held by the business to the partners. $ 48,000 150,000 118,000 $ 316,000 Part B: Prepare a final statement of partnership liquidation.
Transcribed Image Text:Alex and Bess have been in partnership for many years. The partners, who share profits and losses on a 60:40 basis, respectively, wish to retire and have agreed to liquidate the business. Liquidation expenses are estimated to be $7,000. At the date the partnership ceases operations, the balance sheet is as follows: Cash Noncash assets Total assets $ 66,000 250,000 $ 316,000 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 $28,800 of the partnership's liabilities. c. Sold noncash assets for $268.000. d. Distributed safe cash payments to the partners. e. Paid remaining partnership liabilities of $19,200. f. Paid $5,500 in liquidation expenses; no further expenses will be incurred. g. Distributed remaining cash held by the business to the partners. $ 48,000 150,000 118,000 $ 316,000 Part B: Prepare a final statement of partnership liquidation.
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