On June 3, 2008, the firm of Street, Rhodes, and Flynn decided to liquidate their partnership. The partners have capital balances of $16,000, $78,000, and $123,000, respectively. The cash balance is $43,000, the book values of noncash assets total $234,000, and liabilities total $60,000. The partners share income and losses in the ratio of 1:2:2.

Instructions

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

1. All of the noncash assets are sold for $300,000 in cash, the creditors are paid, and the remaining cash is distributed to the partners.

2. All of the noncash assets are sold for $106,000 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.