The partnership of Butler, Osman, and Ward was formed several years ago 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 $51,000 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 $ 47,000 77,000 67,000 195,000 185,000 $ 571,000 Liabilities Butler, loan Butler, capital (25%) Osman, capital (25%) Ward, capital (50%) Total liabilities and capital he following transactions transpire in chronological order during the liquidation of the partnership: Collected 90 percent of the accounts receivable and wrote the remainder off as uncollectible. Sold the office equipment for $28,500, the building for $146,000, and the land for $188,000. Distributed safe payments of cash. Paid all liabilities in full. Paid actual liquidation expenses of $38,500 only. Made final cash distributions to the partners. $ 187,000 47,000 135,000 47,000 155,000 $ 571,000 repare journal entries to record these liquidation transactions. (If no entry is required for a transaction/event, select "No journal

The partnership of Butler, Osman, and Ward was formed several years ago 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 $51,000 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 $ 47,000 77,000 67,000 195,000 185,000 $ 571,000 Liabilities Butler, loan Butler, capital (25%) Osman, capital (25%) Ward, capital (50%) Total liabilities and capital he following transactions transpire in chronological order during the liquidation of the partnership: Collected 90 percent of the accounts receivable and wrote the remainder off as uncollectible. Sold the office equipment for $28,500, the building for $146,000, and the land for $188,000. Distributed safe payments of cash. Paid all liabilities in full. Paid actual liquidation expenses of $38,500 only. Made final cash distributions to the partners. $ 187,000 47,000 135,000 47,000 155,000 $ 571,000 repare journal entries to record these liquidation transactions. (If no entry is required for a transaction/event, select "No journal

Century 21 Accounting General Journal

11th Edition

ISBN:9781337680059

Author:Gilbertson

Publisher:Gilbertson

Chapter23: Accounting For Partnerships

Section: Chapter Questions

Problem 3AP

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Question

The partnership of Butler, Osman, and Ward was formed several years ago 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 $51,000 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
$ 47,000
77,000
67,000
195,000
185,000
$ 571,000
Liabilities
Butler, loan
Butler, capital (25%)
Osman, capital (25%)
Ward, capital (50%)
Total liabilities and capital
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 $28,500, the building for $146,000, and the land for $188,000.
3. Distributed safe payments of cash.
4. Paid all liabilities in full.
5. Paid actual liquidation expenses of $38,500 only.
6. Made final cash distributions to the partners.
$ 187,000
47,000
135,000
47,000
155,000
$ 571,000
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.)

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