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 $6,000. At the date the partnership ceases operations, the balance sheet is as follows: Cash Noncash assets Total assets $ 64,000 230,000 $ 294,000 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 $28,200 of the partnership's liabilities. c. Sold noncash assets for $247,000. d. Distributed safe cash payments to the partners. e. Paid remaining partnership liabilities of $18,800. 1. Paid $4,700 in liquidation expenses; no further expenses will be incurred. g. Distributed remaining cash held by the business to the partners. $ 47,000 138,000 109,000 $ 294,000 Part B: Prepare a final statement of partnership liquidation.
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 $6,000. At the date the partnership ceases operations, the balance sheet is as follows: Cash Noncash assets Total assets $ 64,000 230,000 $ 294,000 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 $28,200 of the partnership's liabilities. c. Sold noncash assets for $247,000. d. Distributed safe cash payments to the partners. e. Paid remaining partnership liabilities of $18,800. 1. Paid $4,700 in liquidation expenses; no further expenses will be incurred. g. Distributed remaining cash held by the business to the partners. $ 47,000 138,000 109,000 $ 294,000 Part B: Prepare a final statement of partnership liquidation.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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
$6,000. At the date the partnership ceases operations, the balance sheet is as follows:
Cashi
Noncash assets
Total assets
$ 64,000
230,000
$ 294,000
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 $28,200 of the partnership's liabilities.
c. Sold noncash assets for $247,000.
d. Distributed safe cash payments to the partners.
e. Paid remaining partnership liabilities of $18,800.
f. Paid $4,700 in liquidation expenses; no further expenses will be incurred.
g. Distributed remaining cash held by the business to the partners.
$ 47,000
138,000
109,000
$ 294,000
Part B: Prepare a final statement of partnership liquidation.
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