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McCartney, Harris, and Smith are dissolving their partnership. Their partnership agreement allocates each partner 1/3 of all income and losses. The current period's ending capital account balances are McCartney - $10,000; Harris - $16,000; and Smith - $(2,000). After all assets are sold and liabilities are paid, there is $24,000 in cash to be distributed. Smith is unable to pay his deficiency. The journal entry to record the distribution of cash should be: McCartney, Capital Harris, Capital Smith, Capital 8,000 8,000 8,000 Cash 24 000

McCartney, Harris, and Smith are dissolving their partnership. Their partnership agreement allocates each partner 1/3 of all income and losses. The current period's ending capital account balances are McCartney - $10,000; Harris - $16,000; and Smith - $(2,000). After all assets are sold and liabilities are paid, there is $24,000 in cash to be distributed. Smith is unable to pay his deficiency. The journal entry to record the distribution of cash should be: McCartney, Capital Harris, Capital Smith, Capital 8,000 8,000 8,000 Cash 24 000

FINANCIAL ACCOUNTING
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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McCartney, Harris, and Smith are dissolving their partnership. Their partnership agreement allocates each partner 1/3 of all income and losses. The current period's ending capital account balances are McCartney - $10,000; Harris - $16,000; and Smith - $(2,000). After all assets are sold and liabilities are paid, there is $24,000 in cash to be distributed. Smith is unable to pay his deficiency. The journal entry to record the distribution of cash should be: McCartney, Capital Harris, Capital Smith, Capital Cash 8,000 8,000 8,000 24,000 McCartney, Capital Harris, Capital Smith, 10,000 16,000 2,000 Capital Cash 24,000 McCartney, Capital Harris, Capital 9,000 15,000 Cash 24,000 Cash Smith, Capital 24,000 2,000 McCartney, Capital Harris, Capital 10,000 16,000 Cash 24,000 McCartney, Capital Harris, 8,000 8,000 Capital Smith, Capital 8,000
Transcribed Image Text:McCartney, Harris, and Smith are dissolving their partnership. Their partnership agreement allocates each partner 1/3 of all income and losses. The current period's ending capital account balances are McCartney - $10,000; Harris - $16,000; and Smith - $(2,000). After all assets are sold and liabilities are paid, there is $24,000 in cash to be distributed. Smith is unable to pay his deficiency. The journal entry to record the distribution of cash should be: McCartney, Capital Harris, Capital Smith, Capital Cash 8,000 8,000 8,000 24,000 McCartney, Capital Harris, Capital Smith, 10,000 16,000 2,000 Capital Cash 24,000 McCartney, Capital Harris, Capital 9,000 15,000 Cash 24,000 Cash Smith, Capital 24,000 2,000 McCartney, Capital Harris, Capital 10,000 16,000 Cash 24,000 McCartney, Capital Harris, 8,000 8,000 Capital Smith, Capital 8,000
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