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: Cash $ 18,000 Liabilities $ 66,000 Accounts receivable 98,000 March, capital 32,000 Inventory 75,000 April, capital 82,000 Land, building, and equipment (net) 42,000 May, capital 53,000 Total assets $ 233,000 Total liabilities and capital $ 233,000 Prepare journal entries for the following transactions: (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Sold all inventory for $63,000 cash. Paid $9,600 in liquidation expenses. Paid $47,000 of the partnership’s liabilities. Collected $53,000 of the accounts receivable. Distributed safe payments of cash; the partners anticipate no further liquidation expenses. Sold remaining accounts receivable for 20 percent of face value. Sold land, building, and equipment for $24,000. Paid all remaining liabilities of the partnership. Distributed cash held by the business to the partners.
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: Cash $ 18,000 Liabilities $ 66,000 Accounts receivable 98,000 March, capital 32,000 Inventory 75,000 April, capital 82,000 Land, building, and equipment (net) 42,000 May, capital 53,000 Total assets $ 233,000 Total liabilities and capital $ 233,000 Prepare journal entries for the following transactions: (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Sold all inventory for $63,000 cash. Paid $9,600 in liquidation expenses. Paid $47,000 of the partnership’s liabilities. Collected $53,000 of the accounts receivable. Distributed safe payments of cash; the partners anticipate no further liquidation expenses. Sold remaining accounts receivable for 20 percent of face value. Sold land, building, and equipment for $24,000. Paid all remaining liabilities of the partnership. Distributed cash held by the business to the partners.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
March, April, and May have been in
Cash | $ | 18,000 | Liabilities | $ | 66,000 |
98,000 | March, capital | 32,000 | |||
Inventory | 75,000 | April, capital | 82,000 | ||
Land, building, and equipment (net) | 42,000 | May, capital | 53,000 | ||
Total assets | $ | 233,000 | Total liabilities and capital | $ | 233,000 |
Prepare journal entries for the following transactions: (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No
- Sold all inventory for $63,000 cash.
- Paid $9,600 in liquidation expenses.
- Paid $47,000 of the partnership’s liabilities.
- Collected $53,000 of the accounts receivable.
- Distributed safe payments of cash; the partners anticipate no further liquidation expenses.
- Sold remaining accounts receivable for 20 percent of face value.
- Sold land, building, and equipment for $24,000.
- Paid all remaining liabilities of the partnership.
- Distributed cash held by the business to the partners.
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