Lasu, Ramirez, and Toney, who share income and loss in a 2:1:2 ratio, plan to liquidate their partnership. At liquidation, their balance sheet appears as follows.

Required
Prepare journal entries for
(a) The sale of equipment,
(b) The allocation of its gain or loss,
(c) The payment of liabilities at book value,
(d) The distribution of cash in each of the following separate cases:
Equipment is sold for
(1) $650,000;
(2) $530,000;
(3) $200,000 and any partners with capital deficits pay in the amount of their deficits;
(4) $150,000 and the partners have no assets other than those invested in the partnership. (Round amounts to the nearest dollar.)

Transcribed Image Text:

LASU, RAMIREZ, AND TONEY Balance Sheet January 18 Assets Cash Equipment $348,600 617,200 Llablties and Equity Accounts payable 342,600 300,400 195,800 127,000 Toney, Capltal Total Ilabilites and equity Total assets 420