Fred and George have been in partnership for many years. The partners, who share profits and losses

Question:

Fred and George 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 $10,000. At the date the partnership ceases operations, the balance sheet is as follows:

Part A
Prepare journal entries for the following transactions:
a. Distributed safe cash payments to the partners.
b. Paid $40,000 of the partnershipâ€™s liabilities.
c. Sold noncash assets for $220,000.
d. Distributed safe cash payments to the partners.
e. Paid all remaining partnership liabilities of $40,000.
f. Paid $8,000 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 partnershipliquidation.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... 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.... Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...