On December 31m 3013 The Candy Company has $45,000 in cash, noncash assets of $120,000, liabilities of $50,000.The capital balances of the two partners are Tootsie $70,000 and Reeses $45,000. The firm is liquidated, and $120,000is received for the noncash assets. Tootsie and Reeses income ratios are 70% and 30%, respectively. Instructions:Develop a cash distribution schedule and show the journal entry for each step in the liquidation process.

ParticularsTootsieReesesTotalcapital balances$70,000$45,000$115,000Less: Total Assets($120,000)Add:…

Answered: Develop a cash distribution schedule…

Business

Accounting

Develop a cash distribution schedule and show the journal entry for each step in the liquidation process.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

On December 31m 3013 The Candy Company has $45,000 in cash, noncash assets of $120,000, liabilities of $50,000.
The capital balances of the two partners are Tootsie $70,000 and Reeses $45,000. The firm is liquidated, and $120,000
is received for the noncash assets. Tootsie and Reeses income ratios are 70% and 30%, respectively. Instructions:
Develop a cash distribution schedule and show the journal entry for each step in the liquidation process.

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Step 1: Compute Initial cash distribution

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