The partnership of Garcia, Iglesias, and Kassabian 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 $41,000 are expected. The partnership balance sheet at the start of liquidation is as follows: Cash $ 37,000 Liabilities $ 177,000 Accounts receivable 67,000 Garcia, loan 37,000 Office equipment (net) 57,000 Garcia, capital (25%) 85,000 Building (net) 145,000 Iglesias, capital (25%) 37,000 Land 135,000 Kassabian, capital (50%) 105,000 Total assets $ 441,000 Total liabilities and capital $ 441,000 Problem 15 - 33 Part B The 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 $23, 500, the building for $106,000, and the land for $148,000. Distributed safe payments of cash. Paid all liabilities in full. Paid actual liquidation expenses of $33,500 only. Made final cash distributions to the partners. Required: Prepare journal entries to record these liquidation transactions. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. A - Collected 90 percent of the accounts receivable and wrote the remainder off as uncollectible. B - Sold the office equipment for $23, 500, the building for $106,000, and the land for $148,000. C-Distributed safe payments of cash. D - Paid all liabilities in full. E - Paid actual liquidation expenses of $33,500 only. F-Made final cash distributions to the partners.
The partnership of Garcia, Iglesias, and Kassabian 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 $41,000 are expected. The partnership balance sheet at the start of liquidation is as follows: Cash $ 37,000 Liabilities $ 177,000 Accounts receivable 67,000 Garcia, loan 37,000 Office equipment (net) 57,000 Garcia, capital (25%) 85,000 Building (net) 145,000 Iglesias, capital (25%) 37,000 Land 135,000 Kassabian, capital (50%) 105,000 Total assets $ 441,000 Total liabilities and capital $ 441,000 Problem 15 - 33 Part B The 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 $23, 500, the building for $106,000, and the land for $148,000. Distributed safe payments of cash. Paid all liabilities in full. Paid actual liquidation expenses of $33,500 only. Made final cash distributions to the partners. Required: Prepare journal entries to record these liquidation transactions. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. A - Collected 90 percent of the accounts receivable and wrote the remainder off as uncollectible. B - Sold the office equipment for $23, 500, the building for $106,000, and the land for $148,000. C-Distributed safe payments of cash. D - Paid all liabilities in full. E - Paid actual liquidation expenses of $33,500 only. F-Made final cash distributions to the partners.
Chapter11: Partnerships: Distributions, Transfer Of Interests, And Terminations
Section: Chapter Questions
Problem 43P
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Transcribed Image Text:The partnership of Garcia, Iglesias, and Kassabian 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 $41,000 are expected. The partnership balance sheet at the start of liquidation is as
follows:
Cash $ 37,000 Liabilities $ 177,000
Accounts receivable 67,000 Garcia, loan 37,000
Office equipment (net) 57,000 Garcia, capital (25%) 85,000
Building (net) 145,000 Iglesias, capital (25%) 37,000
Land 135,000 Kassabian, capital (50%) 105,000
Total assets $ 441,000 Total liabilities and capital $ 441,000
Problem 15 - 33 Part B
The 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 $23, 500, the building for $106,000, and the land for $148,000.
Distributed safe payments of cash.
Paid all liabilities in full.
Paid actual liquidation expenses of $33,500 only.
Transcribed Image Text:Made final cash distributions to the partners.
Required:
Prepare journal entries to record these liquidation transactions.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
A - Collected 90 percent of the accounts receivable and wrote the remainder off as uncollectible.
B - Sold the office equipment for $23, 500, the building for $106,000, and the land for $148,000.
C-Distributed safe payments of cash.
D - Paid all liabilities in full.
E - Paid actual liquidation expenses of $33,500 only.
F-Made final cash distributions to the partners.
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