Homework Help is Here – Start Your Trial Now!
Business
Accounting
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

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
Do not give image format
[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:[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.
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
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
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Accounting for Liquidation of Companies
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS