Question: The Discount Partnership is being liquidated The current balance sheet

The Discount Partnership is being liquidated. The current balance sheet is shown here.
Discount Partnership
Balance Sheet
January 14, 2008
Assets .
Cash .............. $ 25,000
Other assets ............. 120,000
Total assets ............ $145,000
Liabilities and Partners’ Equity
Accounts payable ......... $ 40,000
Dawson, capital ........... 31,000
Feeney, capital ........... 65,000
Hardin, capital ............ 9,000
Total liabilities and partners’ equity .. $145,000

Dawson, Feeney, and Hardin share profits and losses in a 30:40:30 ratio.

Required:
A. Prepare a schedule of partnership liquidation for each of the following three independent cases.
(1) The noncash assets are sold for $60,000, and any partner with a deficit is unable to eliminate any of the deficit.
(2) The noncash assets are sold for $60,000, and any partner with a deficit is able to invest cash equal to the amount of the deficit.
(3) The noncash assets are sold for $50,000, and any partner with a deficit is able to invest up to $8,000 cash in the partnership.
B. Prepare all necessary journal entries for case 2 above.



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  • CreatedMarch 16, 2015
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