The partnership of Garcia, Iglesias, and Kassablan 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 $48,000 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 $ 44,000 74,000 64,000 180,000 170,000 $ 532,000 Liabilities Garcia, loan Garcia, capital (25%) Iglesias, capital (25%) Kassabian, capital (50%) Total liabilities and capital $ 184,000 44,000 120,000 44,000 140,000 $ 532,000
The partnership of Garcia, Iglesias, and Kassablan 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 $48,000 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 $ 44,000 74,000 64,000 180,000 170,000 $ 532,000 Liabilities Garcia, loan Garcia, capital (25%) Iglesias, capital (25%) Kassabian, capital (50%) Total liabilities and capital $ 184,000 44,000 120,000 44,000 140,000 $ 532,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![[The following information applies to the questions displayed below.]
The partnership of Garcia, Iglesias, and Kassablan 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 $48,000 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
$ 44,000
74,000
64,000
180,000
170,000
$ 532,000
Liabilities
Garcia, loan
Garcia, capital (25%)
4. Paid all liabilities in full.
5. Pald actual liquidation expenses of $37,000 only.
6. Made final cash distributions to the partners.
Iglesias, capital (25%)
Kassablan, 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 $27,000, the building for $134,000, and the land for $176,000.
3. Distributed safe payments of cash.
$ 184,000
44,000
120,000
44,000
140,000
$ 532,000
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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1a063afd-1328-45c9-8108-d6b0d29797d8%2F0cfd5e6e-c781-446f-90c8-49d5870f80cd%2F00rkth_processed.jpeg&w=3840&q=75)
Transcribed Image Text:[The following information applies to the questions displayed below.]
The partnership of Garcia, Iglesias, and Kassablan 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 $48,000 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
$ 44,000
74,000
64,000
180,000
170,000
$ 532,000
Liabilities
Garcia, loan
Garcia, capital (25%)
4. Paid all liabilities in full.
5. Pald actual liquidation expenses of $37,000 only.
6. Made final cash distributions to the partners.
Iglesias, capital (25%)
Kassablan, 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 $27,000, the building for $134,000, and the land for $176,000.
3. Distributed safe payments of cash.
$ 184,000
44,000
120,000
44,000
140,000
$ 532,000
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.
Transcribed Image Text: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.
View transaction let
Journal entry worksheet
A
B
Transaction
1
C
Note: Enter debits before credits
Record entry
Collected 90 percent of the accounts receivable and wrote the remainder off as
uncollectible.
D
E F
General Journal
Clear entry
Debit
Credit
View general journal
A
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