Question: The partners in Newman Company decide to liquidate the firm

The partners in Newman Company decide to liquidate the firm when the balance sheet shows the following.


The partners share income and loss 5:3:2. During the process of liquidation, the transactions below were completed in the following sequence.
1. A total of $55,000 was received from converting noncash assets into cash.
2. Gain or loss on realization was allocated to partners.
3. Liabilities were paid in full.
4. Cash was paid to the partners with credit balances.

Instructions
(a) Prepare a schedule of cash payments.
(b) Prepare the entries to record the transactions.
(c) Post to the cash and capitalaccounts.
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  • CreatedJanuary 30, 2014
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