Ole Low, Arnt Olson, and Stig Lokum decided to liquidate the CRANE partnership on December 31 of the current year, and go their separate ways. The partners share profit and losses equally. As at December 31, the partnership had cash of $14,000, noncash assets of $119,000, and liabilities of $18,000. Before selling their noncash assets, the partners had capital balances of $44,700, $62,300, and $8,000, respectively. The noncash assets were sold for $80,000 and the creditors were paid.

Calculate the loss on the sale of the noncash assets and the amount of cash remaining after paying the liabilities.

Loss on sale of noncash assets		$
Cash balance after paying the liabilities		$

Calculate the balance in each of the partners' capital accounts after allocating the loss from the sale of the noncash assets and paying the liabilities. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

		O. Low		A. Olson		S. Lokum
Balance after allocating the loss from the sale of noncash assets and the payment of liabilities		$		$		$

Assume that all of the partners have the personal resources to cover a deficit in their capital accounts. Prepare journal entries to record any cash receipts from the partners to cover any existing deficit and to record the final distribution of cash. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Dec. 31	S. Lokum, CapitalS. Lokum, DrawingsA. Olson, DrawingsCashA. Olson, Capital
	S. Lokum, CapitalA. Olson, CapitalS. Lokum, DrawingsA. Olson, DrawingsCash
	(To invest cash in business.)
Dec. 31	CashO. Low, CapitalS. Lokum, CapitalA. Olson, CapitalA. Olson, Drawings
	CashO. Low, CapitalA. Olson, DrawingsA. Olson, CapitalS. Lokum, Capital
	S. Lokum, CapitalA. Olson, DrawingsO. Low, CapitalA. Olson, CapitalCash
	(To record final distribution to partners.)

Now assume that the partners do not have the personal resources to cover a deficit in their capital accounts. Prepare journal entries to allocate any deficit to the remaining partners and to record the final distribution of cash. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Dec. 31	A. Olson, DrawingsS. Lokum, CapitalS. Lokum, DrawingsO. Low, CapitalA. Olson, Capital
	O. Low, CapitalS. Lokum, CapitalA. Olson, CapitalA. Olson, DrawingsS. Lokum, Drawings
	S. Lokum, CapitalO. Low, CapitalA. Olson, DrawingsS. Lokum, DrawingsA. Olson, Capital
	(To reallocate capital deficiency.)
Dec. 31	O. Low, CapitalA. Olson, CapitalCashA. Olson, DrawingsO. Low, Drawings
	O. Low, DrawingsA. Olson, DrawingsA. Olson, CapitalO. Low, CapitalCash
	O. Low, CapitalCashO. Low, DrawingsA. Olson, DrawingsA. Olson, Capital
	(To record final distribution to partners.)