Alex and Bess have been in partnership for many years. The partners, who share profits and losses on a 60:40 basis, respectively, wish to retire and have agreed to liquidate the business. Liquidation expenses are estimated to be $9,500. At the date the partnership ceases operations, the balance sheet is as follows: Cash Noncash assets Total assets $ 59,000 180,000 $ 239,000 Liabilities Alex, capital Bess, capital Total liabilities and capital Part A: Prepare journal entries for the following transactions that occurred in chronological order: a. Distributed safe cash payments to the partners. b. Paid $26,700 of the partnership's liabilities. c. Sold noncash assets for $194,500. d. Distributed safe cash payments to the partners. e. Paid remaining partnership liabilities of $17,800. f. Paid $7,600 in liquidation expenses; no further expenses will be incurred. g. Distributed remaining cash held by the business to the partners. $ 44,500 108,000 86,500 $ 239,000 Part B: Prepare a final statement of partnership liquidation.
Alex and Bess have been in partnership for many years. The partners, who share profits and losses on a 60:40 basis, respectively, wish to retire and have agreed to liquidate the business. Liquidation expenses are estimated to be $9,500. At the date the partnership ceases operations, the balance sheet is as follows: Cash Noncash assets Total assets $ 59,000 180,000 $ 239,000 Liabilities Alex, capital Bess, capital Total liabilities and capital Part A: Prepare journal entries for the following transactions that occurred in chronological order: a. Distributed safe cash payments to the partners. b. Paid $26,700 of the partnership's liabilities. c. Sold noncash assets for $194,500. d. Distributed safe cash payments to the partners. e. Paid remaining partnership liabilities of $17,800. f. Paid $7,600 in liquidation expenses; no further expenses will be incurred. g. Distributed remaining cash held by the business to the partners. $ 44,500 108,000 86,500 $ 239,000 Part B: Prepare a final statement of partnership liquidation.
Chapter11: Partnerships: Distributions, Transfer Of Interests, And Terminations
Section: Chapter Questions
Problem 27P
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Transcribed Image Text:Alex and Bess have been in partnership for many years. The partners, who share profits and losses on a 60:40 basis,
respectively, wish to retire and have agreed to liquidate the business. Liquidation expenses are estimated to be $9,500. At
the date the partnership ceases operations, the balance sheet is as follows:
Cash
Noncash assets
Total assets
$ 59,000
180,000
$ 239,000
Liabilities
Alex, capital
Bess, capital
Total liabilities and capital
Part A: Prepare journal entries for the following transactions that occurred in chronological order:
a. Distributed safe cash payments to the partners.
b. Paid $26,700 of the partnership's liabilities.
c. Sold noncash assets for $194,500.
d. Distributed safe cash payments to the partners.
e. Paid remaining partnership liabilities of $17,800.
f. Paid $7,600 in liquidation expenses; no further expenses will be incurred.
g. Distributed remaining cash held by the business to the partners.
$ 44,500
108,000
86,500
$ 239,000
Part B: Prepare a final statement of partnership liquidation.
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