Alex and Bess have been in partnership for many years. The partners, who share profits and losses on a 70:30 basis, respectively, wish to retire and have agreed to liquidate the business. Liquidation expenses are estimated to be $7,500. At the date the partnership ceases operations, the balance sheet is as follows: Cash Noncash assets Total assets $ 48,500 Alex, capital 182,000 Bess, capital 96,500 $ 327,000 Total liabilities and capital $327,000 $ 67,000 260,000 Liabilities Part A: Prepare journal entries for the following transactions that occurred in chronological order: 1. Distributed safe cash payments to the partners. 2. Paid $29,100 of the partnership's liabilities. 3. Sold noncash assets for $278,500. 4. Distributed safe cash payments to the partners. 5. Paid remaining partnership liabilities of $19,400. 6. Paid $5,900 in liquidation expenses; no further expenses will be incurred. 7. Distributed remaining cash held by the business to the partners.
Alex and Bess have been in partnership for many years. The partners, who share profits and losses on a 70:30 basis, respectively, wish to retire and have agreed to liquidate the business. Liquidation expenses are estimated to be $7,500. At the date the partnership ceases operations, the balance sheet is as follows: Cash Noncash assets Total assets $ 48,500 Alex, capital 182,000 Bess, capital 96,500 $ 327,000 Total liabilities and capital $327,000 $ 67,000 260,000 Liabilities Part A: Prepare journal entries for the following transactions that occurred in chronological order: 1. Distributed safe cash payments to the partners. 2. Paid $29,100 of the partnership's liabilities. 3. Sold noncash assets for $278,500. 4. Distributed safe cash payments to the partners. 5. Paid remaining partnership liabilities of $19,400. 6. Paid $5,900 in liquidation expenses; no further expenses will be incurred. 7. Distributed remaining cash held by the business to the partners.
Chapter10: Partnerships: Formation, Operation, And Basis
Section: Chapter Questions
Problem 59P
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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
70:30 basis, respectively, wish to retire and have agreed to liquidate the business. Liquidation expenses
are estimated to be $7,500. At the date the partnership ceases operations, the balance sheet is as follows:
Cash
Noncash assets
Total assets
Liabilities
Alex, capital
182,000
Bess, capital
96,500
$ 327,000 Total liabilities and capital $327,000
$ 67,000
260,000
$ 48,500
Part A: Prepare journal entries for the following transactions that occurred in chronological order:
1. Distributed safe cash payments to the partners.
2. Paid $29,100 of the partnership's liabilities.
3. Sold noncash assets for $278,500.
4. Distributed safe cash payments to the partners.
5. Paid remaining partnership liabilities of $19,400.
6. Paid $5,900 in liquidation expenses; no further expenses will be incurred.
7. Distributed remaining cash held by the business to the partners.
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