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, 2023, when the balance sheet shows the following:

Required

Prepare the entries on December 31, 2023, 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, 2023 Assets Cash............. Property, plant, and equipment...... Less: Accumulated depreciation... Total assets........... Liabilities Accounts payable.......... Equity Trish Craig, capital... Ted Smith, capital.... Total equity...........….…... Total liabilities and equity......... $ 91,200 $513,600 199,200 314,400 $405,600 $ 50,400 $244,800 110,400 355,200 $405,600