The partners in Crawford Company decide to liquidate the firm when the statement of financial position shows the following.

The partners share income and loss 5:3:2. During the process of liquidation, the following transactions were completed in the following sequence.
1. A total of €51,000 was received from converting non-cash assets into cash.
2. Gain or loss on realization was allocated to partners.
3. Liabilities were paid in full.
4. P. Roper paid his capital deficiency.
5. Cash was paid to the partners with credit balances.

Instructions
a. Prepare the entries to record the transactions.
b. Post to the cash and capital accounts.
c. Assume that Roper is unable to pay the capital deficiency.
1. Prepare the entry to allocate Roper’s debit balance to Jamison and Moyer.
2. Prepare the entry to record the final distribution of cash.

Transcribed Image Text:

Crawford Company Statement of Financial Position May 31, 2020 Owners’ Equity and Liabilities A. Jamison, capital S. Moyer, capital P. Roper, capital Notes payable Assets Equipment Accumulated depreciation equipment € 21,000 (5,500) € 33,000 21,000 Inventory Accounts receivable Allowance for doubtful accounts 34,500 25,000 (1,000) Accounts payable 3,000 13,500 27,000 Salaries and wages payable 27,500 €101,500 Cash 4,000 €101,500