6) The Hylands Hotels are liquidating their partnership. Before selling the assets and paying liabilities, the capital balances for the partners are: Martha $45,000; Nathan $36,000 and Orin $26,000. The profit and loss sharing ratio has been 2:2:1 for Martha, Nathan and Orin respectively. The partnership has cash $68,000, $75,000 noncash assets and $36,000Accounts payable.

6a. Assume the partnership sells the non-cash assets and received $84,000 in cash.

6b. Assume the partnership sells the noncash assets and received $35,000.

Instructions

Under both assumptions, prepare the entries to record:

(a) The sale of noncash assets.

(b) The allocation of the gain or loss on liquidation to the partners.

(c) Payment of creditors.

(d) Distribution of cash to the partners.

7) Jack Jones, a Partner in the Hyland Company made the following capital cash contributions to the company in 2019.

. 01/01/17: $100,000

. 03/31/17: $35,000

. 07/01/17: $15,000

. 11/30/17: $20,000

The Partnership agreed to pay Jones a 12% interest on his weighted average capital balance as of December 31.

Instructions

a. Compute the interest paid to Jones on 31 December 2019.

8) James, Kenny and Larry have following capital balances 75,000; 45,000 and 30,000 respectively. Income distribution ratios are 3:2:1 for James, Kenny and Larry. Prepare journal entries to record the withdrawal under the following assumptions:

(a) Larry retires and the remaining partners, James and Kenny agree to pay him $20,000 each directly from their personal assets for one half of Larry's interest.

(b) Larry retires and receives $35,000 from the partnership. The ratio for James and Kenny is 3:2