Trish Craig and Ted Smith have a bio-energy and consulting business and share profit and losses in a 3:1 ratio. They decide to liquidate their partnership on December 31, 2020, when the balance sheet shows the following:

Required

Prepare the entries on December 31, 2020, to record the liquidation under each of the following independent assumptions:

a. Property, plant, and equipment are sold for $720,000.

b. Property, plant, and equipment are sold for $140,000.

Transcribed Image Text:

Craig and Smith Consulting Balance Sheet December 31, 2020 Liabilities Accounts payable. Assets $ 91,200 Cash Property, plant, and equipment. Less: Accumulated depreciation. $ 50,400 $513,600 199,200 Equity Trish Craig, capital. Ted Smith, capital. Total equity. Total liabilities and equity. 314,400 $244,800 110,400 Total assets $405,600 355,200 $405,600