The partnership of Bauer, Ohtani, and Souza has elected to cease all operations and liquidate its business

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The partnership of Bauer, Ohtani, and Souza has elected to cease all operations and liquidate its business property. 


A balance sheet drawn up at this time shows the following account balances:image


Part A


Prepare a predistribution plan for this partnership.



Part B


The following transactions occur in liquidating this business:


1. Distributed safe payments of cash immediately to the partners. Liquidation expenses of $8,000 are estimated as a basis for this computation.


2. Sold noncash assets with a book value of $94,000 for $60,000.


3. Paid all liabilities.


4. Distributed safe payments of cash again.


5. Sold remaining noncash assets for $51,000.


6. Paid actual liquidation expenses of $6,000 only.


7. Distributed remaining cash to the partners and closed the financial records of the business permanently.


Prepare a final statement of liquidation for this partnership using the predistribution plan to determine payments of cash to partners.



Part C


Prepare journal entries to record the liquidation transactions reflected in the final statement of liquidation.

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Advanced Accounting

ISBN: 9781264798483

15th Edition

Authors: Joe Ben Hoyle, Thomas Schaefer And Timothy Doupnik

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