During the liquidation process the following transactions occur in 2020:January 15January 20January 24January 25January 27January 31February 3February 10 Paid final liquidation expenses of $8,000February 28 Distributed remaining cash to the partners to close the partnershipCollected $60,000 of cash from accounts receivablePaid $20,000 cash to bank to retire loanSold office furniture with a book value of $50,000 for $35,000 cashDistributed safe capital balances to the partnersPaid $10,000 cash for accounts payableSold remaining office furniture for $20,000 cashSold remaining accounts receivable for $30,000 cashRequired:• Prepare a pre-distribution plan as of December 31, 2019• Prepare journal entries to record the actual liquidation transactionsPrepare a schedule of liquidation as of February 28, 2020 Grell, Hamilton, Kieffer, and Mally have been operating a consulting business as a partnership.Based on the provisions of the original articles of partnership, all profits and losses have beenallocated on a 4:2:2:2 ratio, respectively. The partners have had difficulty agreeing whichclients to pursue and decided they could no longer work together. As a result, they decided toliquidate the partnership.They ceased operations on December 31, 2019. The partnership balance sheet reflects thefollowing:GHKM ConsultingBalance SheetDecember 31, 2019$ 20,000 Accounts Payable$ 10,00020,00095,00020,00025,00030,000$200,000CashAccounts Receivable100,000 Bank Loan Payable80,000 Grell, CapitalHamilton, CapitalKieffer, CapitalMally, Capital$200,000 Total Liabilities & CapitalOffice Furniture, netTotal AssetsThe partnership anticipates they will incur $5,000 of costs to liquidate their noncash assets.

To solve the answers the following cash account will be needed to prepare before answering. Cash…

During the liquidation process the following transactions occur in 2020: January 15 January 20 January 24 January 25 January 27 January 31 February 3 February 10 Paid final liquidation expenses of $8,000 February 28 Distributed remaining cash to the partners to close the partnership Collected $60,000 of cash from accounts receivable Paid $20,000 cash to bank to retire loan Sold office furniture with a book value of $50,000 for $35,000 cash Distributed safe capital balances to the partners Paid $10,000 cash for accounts payable Sold remaining office furniture for $20,000 cash Sold remaining accounts receivable for $30,000 cash Required: • Prepare a pre-distribution plan as of December 31, 2019 • Prepare journal entries to record the actual liquidation transactions • Prepare a schedule of liquidation as of February 28, 2020

During the liquidation process the following transactions occur in 2020: January 15 January 20 January 24 January 25 January 27 January 31 February 3 February 10 Paid final liquidation expenses of $8,000 February 28 Distributed remaining cash to the partners to close the partnership Collected $60,000 of cash from accounts receivable Paid $20,000 cash to bank to retire loan Sold office furniture with a book value of $50,000 for $35,000 cash Distributed safe capital balances to the partners Paid $10,000 cash for accounts payable Sold remaining office furniture for $20,000 cash Sold remaining accounts receivable for $30,000 cash Required: • Prepare a pre-distribution plan as of December 31, 2019 • Prepare journal entries to record the actual liquidation transactions • Prepare a schedule of liquidation as of February 28, 2020

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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