Mark Malone, Pete Patton, and Sally Spencer formed a partnership on January 1, 2024. Their original capital investments (all cash) were $140,000, $160,000, and $100,000, respectively. During the first year of operations, Mark withdrew $30,000, and the partnership reported a net income of $60,000. The partnership agreement stipulates that all income and losses are to be divided in the ratio of the original capital investments. At the beginning of the second year, the partners decided to liquidate the business because of a disagreement. The assets and liabilities on January 2, 2025, were as follows: Cash, $37,000; Accounts Receivable, $129,000; Inventory, $188,000; Land, $85,000; Building (net), $180,000; Furniture and Fixtures (net), $30,000; Accounts Payable, $74,000; and Mortgage Payable, $145,000. The inventory was sold for three- quarters of its book value, the furniture and fixtures brought in $10,000, and $92,000 of the accounts receivable were collected. The remaining receivables were uncollectible. After the losses were allocated according to the partnership agreement and the accounts payable were paid in full, Pete accepted the land and building at book value and assumed the mortgage payable at book value as partial settlement of his capital interest. The cash balance was then distributed to the partners.

Required:
A. Prepare a statement of changes in partners’ capital for the year ended December 31, 2024.
B. Prepare the journal entries to close the Drawing and Income Summary accounts for 2024.
C. Prepare a schedule of partnership liquidation.
D. Prepare the journal entries to record the liquidation activities.