Cheese Partners has decided to close the store. At the date of closing, Cheese Partners had the following account balances: Capital $8,000 Cash 8,000 Inventory 12,000 Store fixtures 8,000 Accounts payable 22,000 A competitor agrees to buy the inventory and store fixtures for $15,000. Prepare the journal entries detailing the liquidation, assuming that partners Colette and Swarma are sharing profits on a 50:50 basis. If an amount box does not require an entry, leave it blank.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Cheese Partners has decided to close the store. At the date of closing, Cheese Partners had the following account balances:

Capital $8,000
Cash 8,000
Inventory 12,000
Store fixtures 8,000
Accounts payable 22,000

A competitor agrees to buy the inventory and store fixtures for $15,000.

Prepare the journal entries detailing the liquidation, assuming that partners Colette and Swarma are sharing profits on a 50:50 basis. If an amount box does not require an entry, leave it blank.

 

Cash
15,000
Loss on Sale
5,000
Inventory
12,000
Store Fixtures
8,000
Colette, Capital
2,500
Swarma, Capital
2,500
Loss on Sale
5,000
Accounts Payable
22,000
Cash
22,000
Colette, Capital
2,500
Swarma, Capital
2,500
Cash
5,000
Transcribed Image Text:Cash 15,000 Loss on Sale 5,000 Inventory 12,000 Store Fixtures 8,000 Colette, Capital 2,500 Swarma, Capital 2,500 Loss on Sale 5,000 Accounts Payable 22,000 Cash 22,000 Colette, Capital 2,500 Swarma, Capital 2,500 Cash 5,000
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