Complete the following questions by preparing worksheet and journal entries given below. The partnership of Butler, Osman, and Ward was formed several years as a local tax preparation firm. Two partners have reached retirement age and the partners have decided to terminate operations and liquidate the business. Liquidation expenses of $53,000 are expected. The partnership balance sheet at the start of liquidation is as follows: Cash Accounts receivable Office equipment (net) Building (net) Land Total assets $ 49,000 79,000 69,000 205,000 195,000 $ 597,000 Liabilities Butler, loan Butler, capital (25%) Osman, capital (25%) Ward, capital (50%) S 189,000 49,000 145,000 49,000 165,000 Total llabilities and capital $ 597,000 The following transactions transpire in chronological order during the liquidation of the partnership: 1. Collected 90 percent of the accounts receivable and wrote the remainder off as uncollectible. 2. Sold the office equipment for $29,500, the building for $154,000, and the land for $196,000. 3. Made safe capital distributions. 4. Paid all liabilities in full. 5. Paid actual liquidation expenses of $39.500 only. 6. Made final cash distributions to the partners. Prepare journal entries to record these liquidation transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Complete the following questions by preparing worksheet and journal entries given below. The partnership of Butler, Osman, and Ward was formed several years as a local tax preparation firm. Two partners have reached retirement age and the partners have decided to terminate operations and liquidate the business. Liquidation expenses of $53,000 are expected. The partnership balance sheet at the start of liquidation is as follows: Cash Accounts receivable Office equipment (net) Building (net) Land Total assets $ 49,000 79,000 69,000 205,000 195,000 $ 597,000 Liabilities Butler, loan Butler, capital (25%) Osman, capital (25%) Ward, capital (50%) S 189,000 49,000 145,000 49,000 165,000 Total llabilities and capital $ 597,000 The following transactions transpire in chronological order during the liquidation of the partnership: 1. Collected 90 percent of the accounts receivable and wrote the remainder off as uncollectible. 2. Sold the office equipment for $29,500, the building for $154,000, and the land for $196,000. 3. Made safe capital distributions. 4. Paid all liabilities in full. 5. Paid actual liquidation expenses of $39.500 only. 6. Made final cash distributions to the partners. Prepare journal entries to record these liquidation transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Complete the following questions by preparing worksheet and journal entries given below.
The partnership of Butler, Osman, and Ward was formed several years as a local tax preparation firm. Two partners have reached retirement age and the partners have decided to terminate operations and liquidate the business. Liquidation expenses
of $53,000 are expected. The partnership balance sheet at the start of liquidation is as follows:
Cash
Accounts receivable
Office equipment (net)
Building (net)
Land
Total assets
S
S
49,000
79,000
69,000
205,000
195,000
597,000
Liabilities
Butler, loan
Butler, capital (25%)
Osman, capital (25%)
Ward, capital (50%)
$
Total liabilities and capital S
189,000
49,000
145,000
49,000
165,000
597,000
The following transactions transpire in chronological order during the liquidation of the partnership:
1. Collected 90 percent of the accounts receivable and wrote the remainder off as uncollectible.
2. Sold the office equipment for $29,500, the building for $154,000, and the land for $196,000.
3. Made safe capital distributions.
4. Paid all liabilities in full.
5. Paid actual liquidation expenses of $39,500 only.
6. Made final cash distributions to the partners.
Prepare journal entries to record these liquidation transactions. (If no entry is required for a transaction/ovent, select "No journal entry required" in the first account field.)
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