On May 3, 2006, the firm of Imhoff, Baxter, and Wise decided to liquidate their partnership. The partners have capital balances of $30,000, $90,000, and $120,000, respectively. The cash balance is $10,000, the book values of noncash assets total $285,000, and liabilities total $55,000. The partners share income and losses in the ratio of 1:2:2.

Instructions

Prepare a statement of partnership liquidation, covering the period May 3 through May 29 for each of the following independent assumptions:

1. All of the noncash assets are sold for $345,000 in cash, the creditors are paid, and the remaining cash is distributed to the partners.

2. All of the noncash assets are sold for $175,000 in cash, the creditors are paid, and the remaining cash is distributed to the partners.

3. All of the noncash assets are sold for $105,000 in cash, the creditors are paid, the partner with the debit capital balance pays the amount owed to the firm, and the remaining cash is distributed to the partners.