London, Ramirez, and Toney, who share income and loss in a 3:2:1 ratio, plan to liquidate their partnership. At liquidation, their balance sheet appears as follows.

Required
Prepare journal entries for (a) the sale of equipment, (b) the allocation of its gain or loss, (c) the payment of liabilities at book value, and (d) the distribution of cash in each of the following separate cases: Equipment is sold for
(1) $605,400;
(2) $474,000;
(3) $301,200 and any partners with capital deficits pay in the amount of their deficits; and
(4) $271,200 and the partners have no assets other than those invested in the partnership. (Round amounts to the nearestdollar.)

Transcribed Image Text:

LONDON, RAMIREZ, AND TONEY Balance Sheet January 18 Assets Cash ~ ....$179,500 Equipment 552,000 Liabilitles and Equity Accounts payable .. ..$241,500 London, Capltal Ramlrez, Capltal220,500 Toney, Capltal. Total lablitles and equity . $731500 98,000 171,500 Total assets · $731,500