The Discount Partnership is being liquidated. The current balance sheet is shown here.

Dawson, Feeney, and Hardin share profits and losses in a 30:40:30 ratio.

Required:
A. Prepare a schedule of partnership liquidation for each of the following three independent cases.
(1) The noncash assets are sold for $60,000, and any partner with a deficit is unable to eliminate any of the deficit.
(2) The noncash assets are sold for $60,000, and any partner with a deficit is able to invest cash equal to the amount of the deficit.
(3) The noncash assets are sold for $50,000, and any partner with a deficit is able to invest up to $8,000 cash in the partnership.
B. Prepare all necessary journal entries for case 2 above.

Transcribed Image Text:

Assets Cash Other assets Discount Partnership Balance Sheet January 14, 2024 Total assets Liabilities and Partners' Equity Accounts payable Dawson, capital Feeney, capital Hardin, capital Total liabilities and partners' equity $ 25,000 120,000 $145,000 $ 40,000 31,000 65,000 9,000 $145,000