Instructions

After the accounts are closed on February $3,$ prior to liquidating the partnership, the capital accounts of William Gerloff, Joshua Chu, and Courtney Jewett are $$19,180,$$$4,020,$ and $$22,140,$ respectively. Cash and noncash assets total $$5,600$ and $$54,240,$ respectively. Amounts owed to creditors total $$14,500.$ The partners share income and losses in the ratio of $2$:$1$:$1.$ Between February $3$ and February $28,$ the noncash assets are sold for $$34,560,$ the partner with the capital $$ pays the deficiency to the partnership, and the liabilities are paid.

Required:

Prepare a statement of partnership liquidation, indicating $($a$)$ the sale of assets and division of loss, $($b$)$ the payment of liabilities, $($c$)$ the receipt of the deficiency $($from the appropriate partner$),$ and $($d$)$ the distribution of cash.

Assume that the partner with the capital deficiency declares bankruptcy and is unable to pay the deficiency. Journalize the entries on Feb. $28$ to

$($a$)$ allocate the partner's deficiency and $($b$)$ distribute the remaining cash.