Ben, Bev, and Ron are partners in a business that is in the process of liquidation. On January 1, 2016, the ledger accounts show the balances indicated: Cash $25,000 Ben capital $72,000 Inventory 72,000 Bev capital 28,000 Supplies 18,000 Ron capital 15,000 The cash is distributed to partners on January 1, 2016. Inventory and supplies are sold for a lump-sum price of $81,000 on February 9, 2016, and on February 10, 2016, cash on hand is distributed to the partners in final liquidation of the business. Required Prepare the journal entry to distribute available cash on January 1, 2016. Include a safe payments schedule as proper explanation of who should receive cash. Prepare journal entries necessary on February 9, 2016, to record the sale of assets and distribution of the gain or loss to the partners’ capital accounts. Prepare the journal entry to distribute cash on February 10, 2016, in final liquidation of the business.
Ben, Bev, and Ron are partners in a business that is in the process of liquidation. On January 1, 2016, the ledger accounts show the balances indicated:
Cash
$25,000
Ben capital
$72,000
Inventory
72,000
Bev capital
28,000
Supplies
18,000
Ron capital
15,000
The cash is distributed to partners on January 1, 2016. Inventory and supplies are sold for a lump-sum price of $81,000 on February 9, 2016, and on February 10, 2016, cash on hand is distributed to the partners in final liquidation of the business.
Required
Prepare the
Prepare journal entries necessary on February 9, 2016, to record the sale of assets and distribution of the gain or loss to the partners’ capital accounts.
Prepare the journal entry to distribute cash on February 10, 2016, in final liquidation of the business.
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