March, April, and May have been in partnership for a number of years. The partners allocate all profits and losses on a 2:3:1 basis, respectively. Recently, each partner has become personally insolvent and, thus, the partners have decided to liquidate the business in hopes of remedying their personal financial problems. As of September 1, the partnership’s balance sheet is as follows: Prepare journal entries for the following transactions:Sold all inventory for $56,000 cash.Paid $7,500 in liquidation expenses.Paid $40,000 of the partnership’s liabilities.Collected $45,000 of the accounts receivable.Distributed safe cash balances; the partners anticipate no further liquidation expenses.Sold remaining accounts receivable for 30 percent of face value.Sold land, building, and equipment for $17,000.Paid all remaining liabilities of the partnership.Distributed cash held by the business to the partners. CashAccounts receivable.Liabilities....March, capital.April, capital .$ 61,00025,000$ 11,00084,000Inventory...74,00075,000Land, building, andequipment (net).Total assetsMay, capital46,00038,000..... ..$207,000Total liabilities and capital.....$207,000

Journal entries for the transactions:

Answered: Cash Accounts receivable.…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

March, April, and May have been in partnership for a number of years. The partners allocate all profits and losses on a 2:3:1 basis, respectively. Recently, each partner has become personally insolvent and, thus, the partners have decided to liquidate the business in hopes of remedying their personal financial problems. As of September 1, the partnership’s balance sheet is as follows:

Prepare journal entries for the following transactions:

Sold all inventory for $56,000 cash.
Paid $7,500 in liquidation expenses.
Paid $40,000 of the partnership’s liabilities.
Collected $45,000 of the accounts receivable.
Distributed safe cash balances; the partners anticipate no further liquidation expenses.
Sold remaining accounts receivable for 30 percent of face value.
Sold land, building, and equipment for $17,000.
Paid all remaining liabilities of the partnership.
Distributed cash held by the business to the partners.

Cash
Accounts receivable.
Liabilities....
March, capital.
April, capital .
$ 61,000
25,000
$ 11,000
84,000
Inventory...
74,000
75,000
Land, building, and
equipment (net).
Total assets
May, capital
46,000
38,000
..... ..
$207,000
Total liabilities and capital.....
$207,000

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 5 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions