Lui, Montavo, and Johnson plan to liquidate their Premium Pool and Spa business. They have always shared profit and losses in a $1$:$4$:$5$ ratio, and on the day of the liquidation their balance sheet appeared as follows:$$

Premium Pool and Spa

Balance Sheet

June $30,2023$

Assets

Cash $ $80,250$

Machinery $ $618,750$

Less: Accumulated depreciation $152,000466,750$

Total assets $ $547,000$

Liabilities

Accounts payable $ $152,800$

Equity

Jim Lui $ $77,800$

Kent Montavo, capital $202,400$

Dave Johnson, capital $114,000$

Total equity $394,200$

Total liabilities and equity $ $547,000$

Required:

$1.$ Under the assumption that the machinery is sold and the cash is distributed to the proper parties on June $30,2023,$ complete the schedule provided below. Show the sale, the gain or loss allocation, and the distribution of the cash in each of the following unrelated cases:

a$.$ The machinery is sold for $$518,000.($Negative answers should be indicated by a minus sign.$)$

b$.$ The machinery is sold for $$405,000.($Negative answers should be indicated by a minus sign.$)$

Premium Pool and Spa

June $30,2023$

Cash Machinery Accum.

Deprec.,

Machinery Accounts

Payable Jim Lui,

Capital Kent Montavo,

Capital Dave Johnson,

Capital

Account balances June $30,2023$

Sale of Machinery for $$405,000$

Balance

Payment of liabilities

Balance

Distribution of cash to partners

Balance

c$.$ The machinery is sold for $$198,000,$ and any partners with resulting deficits can and do pay in the amount of their deficits. $($Negative answers should be indicated by a minus sign.$)$

Premium Pool and Spa

June $30,2023$

Cash Machinery Accum.

Deprec.,

Machinery Accounts

Payable Jim Lui,

Capital Kent Montavo,

Capital Dave Johnson,

Capital

Account balances June $30,2023$

Sale of Machinery for $$198,000$

Balance

Payment of liabilities

Balance

Johnson pays deficiency

Balance

Distribution of cash to partners

Balance

d$.$ The machinery is sold for $$217,000,$ and the partners have no assets other than those invested in the business. $($Negative answers should be indicated by a minus sign.$)$

Premium Pool and Spa

June $30,2023$

Cash Machinery Accum.

Deprec.,

Machinery Accounts

Payable Jim Lui,

Capital Kent Montavo,

Capital Dave Johnson,

Capital

Account balances June $30,2023$

Sale of Machinery for $$217,000$

Balance

Payment of liabilities

Balance

Allocation of deficiency

Balance

Distribution of cash to partners

Balance

$2.$ Prepare the entry to record the final distribution of cash assuming the machinery is sold for $$518,000.$

Journal entry worksheet

$*$ Record the final distribution of cash to the partners.

Note: Enter debits before credits.

Date General Journal Debit Credit

June $30,2023$