Data for Sedgwick Company are presented in E12-8.
In E12-8, Sedgwick Company at December 31 has cash $20,000, noncash assets $100,000, liabilities $55,000, and the following capital balances: Floyd $45,000 and DeWitt $20,000.
The firm is liquidated, and $105,000 in cash is received for the noncash assets. Floyd and
DeWitt income ratios are 60% and 40%, respectively.
Prepare the entries to record:
(a) The sale of noncash assets.
(b) The allocation of the gain or loss on realization to the partners.
(c) Payment of creditors.
(d) Distribution of cash to the partners.