The Mago Company at December 31 has cash $50,000, noncash assets $250,000, liabilities $138,000, and the following

Question:

The Mago Company at December 31 has cash $50,000, noncash assets $250,000, liabilities $138,000, and the following capital balances: Gonzalez $112,000 and Maldonado $50,000. The firm is liquidated, and $265,000 in cash is received for the noncash assets. Gonzalez and Maldonado income ratios are 60% and 40%, respectively.

Instructions
Prepare the entries to record:
(a) The sale of noncash assets.
(b) The allocation of the gain or loss on to the partners.
(c) Payment of creditors.
(d) Distribution of cash to the partners.

Liquidation
Liquidation in finance and economics is the process of bringing a business to an end and distributing its assets to claimants. It is an event that usually occurs when a company is insolvent, meaning it cannot pay its obligations when they are due....