Alex and Bess have been in partnership for many years. The partners, who share profits and...

• •  

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 $5,000. At the date the partnership ceases operations, the balance sheet is as follows: Cash Noncash assets Total assets $ 47,000 125,000 $ 172,000 Liabilities Alex, capital Bess, capital Total liabilities and capital $ 35,500 75,000 61,500 $ 172,000 Part A: Prepare journal entries for the following transactions that occurred in chronological order: a. Distributed safe cash payments to the partners. b. Pald $21,300 of the partnership's liabilities. c. Sold noncash assets for $136,500. d. Distributed safe cash payments to the partners. e. Pald remaining partnership liabilities of $14,200. f. Paid $3.700 in liquidation expenses; no further expenses will be incurred. g. Distributed remaining cash held by the business to the partners. 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 $5,000. At the date the partnership ceases operations, the balance sheet is as follows: Cash Noncash assets Total assets $ 47,000 125,000 $ 172,000 Liabilities Alex, capital Bess, capital Total liabilities and capital $ 35,500 75,000 61,500 $ 172,000 Part A: Prepare journal entries for the following transactions that occurred in chronological order: a. Distributed safe cash payments to the partners. b. Pald $21,300 of the partnership's liabilities. c. Sold noncash assets for $136,500. d. Distributed safe cash payments to the partners. e. Pald remaining partnership liabilities of $14,200. f. Paid $3.700 in liquidation expenses; no further expenses will be incurred. g. Distributed remaining cash held by the business to the partners. Part B: Prepare a final statement of partnership liquidation.