Fred and George have been in partnership for many years. The partners, who share profits and losses on a 60:40 basis, respectively, wish to retire and have agreed to liquidate the business. Liquidation expenses are estimated to be $10,000. At the date the partnership ceased operations, the balance sheet is as follows:

Cash $100,000 Liabilities $ 80,000

Noncash Assets 200,000 Fred, capital 100,000

Total Assets $,300,000 George, capital 120,000

Total Liab. & Capital $300,000

Part A:

Prepare journal entries for the following transactions:

a. Distributed safe cash payments to the partners

b. Paid $40,000 of the partnerships liabilities

c. Sold noncash assets for $220,000

d. Distributed safe cash payments to the partners

e. Paid all remaining partnership liabilities of $40,000

f. Paid $8,000 in liquidation expenses; no further expenses will be incurred

g. Distributed remaining cash held by the business to the partners.

Part B:

Prepare a final statement of partnership liquidation